What should I do to get my business ready to sell?

Cleaning up the numbers

Buyers discount for anything they cannot verify. Separate personal expenses, such as vehicles, travel or family salaries, from the business's real operating costs, and be ready to explain each adjustment with a receipt or a payroll record rather than a verbal assurance. Reconcile your bookkeeping to your tax filings and your bank statements for at least the last three years; gaps invite deeper diligence, not less.

If the business has related-party transactions, such as a lease from a corporation you also own, document the terms in writing now rather than during negotiations.

Contracts, the lease and licences

Gather every contract the business depends on: customer and supplier agreements, equipment leases, software licences and the commercial lease. Read each one for an assignment or change-of-control clause; most commercial leases require landlord consent to assign, so start thinking now about what the landlord will want to see. Under s. 23 of the Commercial Tenancies Act, a landlord cannot unreasonably withhold consent unless the lease says otherwise, but it can still ask for financial information and take time to respond.

Confirm which licences and permits the business holds and whether each one can be transferred or must be reapplied for by a buyer.

Employees and unwritten arrangements

Put any informal employment arrangements in writing: verbal promises about bonuses, vacation or job titles are exactly what a buyer's diligence will surface and then discount for. Make sure records show accurate start dates, current pay and any outstanding vacation pay, since these figures follow the business under s. 9 of the Employment Standards Act, 2000 if the sale proceeds as an asset deal.

If any employees are family members paid above market rate, or unpaid, expect a buyer to normalize their compensation when assessing what the business really earns.

Corporate records and security registrations

An up-to-date minute book, with share register, director and officer resolutions and any shareholder agreement, speeds up a share sale and avoids last-minute scrambling to reconstruct history. Order a Personal Property Security Act search against your own corporation; old registrations from a paid-off loan or an equipment lease that was never discharged are common and easy to fix now, expensive to discover during a buyer's diligence.

Confirm the corporation is in good standing with the Ontario Business Registry and that all annual filings are current.

We review the minute book and run the PPSA search early, so nothing in the corporate records slows down closing later.