Frequently Asked Questions

Have questions about selling or buying a business? Here are some FAQ’s Business Finders Canada gets from clients.

Seller FAQ’s

Business valuation is a nuanced process, incorporating various factors such as asset value, cash flow, stability of goodwill, owner involvement, expansion opportunities, workforce stability, business longevity, and the type of sale (asset or share). To secure the highest purchase price and ensure a fair deal, these fundamental factors are crucial. The perceived value by the owner, their advisors, or the marketplace may differ, but the market determines the true value of a business.

Your business will be showcased on third-party websites. Our non-specific ads will grab attention and tap into a network of qualified buyers actively seeking businesses like yours.

Depending on their background, accountants may not always be the most reliable source of information. It is crucial they possess real-world experience in selling businesses to support their opinions. Without such experience, it’s important to question the basis of their opinions.

Ensuring confidentiality is paramount when selling a business. We safeguard your company’s identity during the sales process by sharing sensitive information exclusively with potential buyers who have signed a non-disclosure agreement and a buyer profile; this profile includes the buyer’s financial status.

Upon completion of these steps, the potential buyer gains access to the business overview and financial information through our secure online platform.

Financial Documents

  • Five years of Financial Statements (Balance Sheet & Income Statement), or tax returns if financial statements are not available
  • Year-to-date Income Statement up to the most recent month’s end, with comparative balances for the same period in the prior year
  • Profit and Loss statements for the same years covered by the Financial Statements

Equipment Information

  • Current market value of significant equipment (sellable value as of today).
  • List of leased equipment, if applicable, along with copies of related leases.

Property Details

  • Copies of Rental or Lease agreements for premises
  • Property assessments, if applicable


  • Value of inventory at cost (not retail)

Personnel Details

  • List of Owners and Family members involved in the business
  • Roles and responsibilities of each person
  • Annual wages (T4) for each individual
  • The market rate for the work performed by each person

Special Considerations

Any necessary, one-time, non-recurring revenues or expenses are included in the financial statements each year.

Examples: One-time consulting expenses, gain/loss on the sale of equipment, non-essential vehicle expenses, and any other relevant items.
Ensuring accuracy, clarity, and conciseness in providing this information will facilitate a smoother sales process.

In our system, a buyer will fill out an electronic NDA (Non-Disclosure Agreement) along with a number of questions to pre-qualify that buyer. After a follow up call and verification questions we then control the flow of documentation they can see as we release the information slowly. We also control the length of time that they can view this information. No documentation gets emailed directly to buyers. As the buyer continues to show interest, we release more information.

At any time, we can cut off the information and delete it from their portfolio.

Printing privileges and watermarks are on all documents with the date and their name and email address. So yes, confidentiality is of the extreme with Business Finders Canada.

We will present your business to potential buyers after they sign our non-disclosure agreement. The process begins with a Business Profile detailing your business. If interest continues, we will arrange a buyer/seller meeting for you to interact and delve deeper into your business. With your consent, we’ll encourage the buyer to visit your business to experience the location, facility, and operations firsthand (when possible).

When a buyer expresses sufficient interest, we will help prepare a written offer to purchase outlining the buyer’s terms. The offer will have contingencies to be met before the transaction closes. We will present all offers to you. This is a contractual agreement. You have the option to accept, counter, or reject. Timely responses are essential, as the contract expires without one. If you accept or counter the offer, and the buyer agrees to your terms, promptly address and remove contingencies.

Thorough Preparation

Prepare extensively for the sale by addressing potential questions and concerns.
Ensure your business is in optimal condition to impress potential buyers.

Availability for Inquiries

Be readily available to respond to any questions potential buyers may have.
Foster open communication to build trust and facilitate a smooth transaction.

Inventory Management

Streamline and clean up your inventory to showcase its relevance and appeal to buyers.
Highlight key products or services that add significant value.

Financial Transparency

Clean up and organize your financial statements for transparency and clarity.
Provide a comprehensive overview of your business’s financial health.

A share sale involves transferring ownership by selling shares of a corporation. In this transaction, the corporation remains intact, with the outgoing owner resigning from their roles, and the new owner assuming the positions of president and director.

For the seller, a share sale is often preferable due to potential eligibility for the Canadian capital gains exemption, capped at $883,000 per citizen once in their lifetime. However, buyers may be cautious due to possible contingent liabilities, such as unpaid taxes associated with the corporation.

Consulting with your accountant is crucial to understanding the tax implications for your specific situation.

On the other hand, an asset sale occurs when a seller directs the corporation to sell assets and goodwill to another corporation. The selling corporation may undergo a name change or revert to its original numbered status.

Buyers favor asset sales because they acquire a clean corporation with no history or contingent liabilities. For sellers, there can be significant tax implications, as sale proceeds must be either distributed as dividends or charged as management fees, both highly taxable methods.

You are not required to finance any portion of the sale of your business, but you need to be aware of the many reasons to consider this option. With reasonable terms, the chances for a timely sale increase dramatically, and at a higher purchase price. The major reason is that most small businesses attempt to minimize the profits shown on financial statements to reduce tax liability. You will need to understand that your new buyer will be considered a new start-up without any track record. Seller financing may be the only way to sell your company. Businesses that are owner financed almost always sell better than those that aren’t and often sell for 10-15% higher than businesses that do not.

Although it sounds harsh, our considerable experience has proven that it is best not to tell your employees about the sale until immediately before or immediately after the sale. Of course, if there is an employee whose expertise will be needed after the sale, you should introduce the buyer to this employee shortly before closing. Your business broker can assist you in determining the timing for notifying employees of the sale.

This will be dependent on the buyer’s experience and how much there is to learn in your business. Training will be important to most buyers. They need to learn your bookkeeping system, opening and closing procedures, who your suppliers and vendors are and their agents, introduction to employees and customers, and general product knowledge. This time frame can be as little as two weeks and as long as one year.

We recommend it. A lawyer and an accountant might be helpful and are always suggested, but not required. Many transactions conclude successfully without one. If you’re more comfortable using a lawyer and or account, we can recommend a few who are experienced.

Buyer FAQ 

The purpose of a confidentiality agreement is to protect business information. Non-disclosure agreements are used to review financial and company records so that you can make a realistic assessment of the strengths and weaknesses of the business in both quantitative and qualitative terms. You can also determine if the seller’s asking price for the business is reasonable.

Their clients have provided them with plenty of sensitive documents and numbers; it cannot be released to just anyone without proper care for their protection. When a first-time inquirer demands a company’s name, location, or financial details before signing any agreement, a red flag goes up in the broker’s mind.

A business broker will handle all of the details of the business sale and will do everything possible to guide you in the right direction, including, if necessary, introducing you to other professionals who may be able to assist you. Expertise to guide you through the transaction, which includes facility tours, the decision to buy, due diligence, and the lending process to closing. Especially if you’ve never bought a business before, their experience and network of professional contacts are invaluable. At the closing table, we often hear, “We never could have done this without you!”

Usually, the seller pays the fee. The seller signs an exclusive listing agreement with Business Finders Canada in order to market the business to potential buyers. As we’re usually hired by the Seller and have a fiduciary responsibility to them. However, we’re also required to treat every buyer fairly and ethically. We are all licensed REALTORS® (A REALTOR® is a licensed real estate professional who is a member of CREA and, as such, subscribes to a high standard of professional service and a strict Code of Ethics) This is a responsibility we take very seriously. In addition to providing accurate information, we are also concerned with finding the right “fit” for both buyer and seller.

If you have a signed Buyer-Broker Agreement, you are obviously responsible for those fees. Beyond that, there will be costs associated with any other professional advisor you engage – accountant, Merger and Acquisition lawyer, and possibly lender fees.


A share sale involves selling the shares of the corporation to the buyer. When the shares transfer to a new owner, the corporation being sold stays intact, the outgoing owner resigns his/her position as president and director, and the new owner is appointed to these positions.

A share sale is often very desirable to the seller as this type of transaction often qualifies for the capital gains exemption of up to $883,000 that is provided to all Canadian citizens once in their lifetime. A share sale is often not desired by a buyer because of contingent liabilities that might come with the corporation, such as unpaid taxes.

It is best to discuss with your account to determine what tax implication will apply to you.


An asset sale occurs when a seller directs the corporation he or she owns to sell the assets and goodwill (almost always including the name) to another corporation. Quite often, the corporation owned by the seller is then renamed or reverted to its original numbered status.

An asset sale is very desirable to a buyer because it means the buyer will start with a clean corporation, without history, and no worries about contingent liabilities. For the seller, there can be significant tax implications, mainly because the only way to get the sale proceeds into their personal possession is to either dividend them out or charge a management fee to the corporation they still own, both of which are highly taxable.

An asset sale can often be a very complicated transaction. Detailed allocations to asset values need to be negotiated and employees must be let go from the prior corporation and re-hired, often causing tenure issues. In addition, all utilities, contracts, etc. have to be re-assigned to the new entity, credit inquiries may be performed on the new owner, and covenants from the new owner may also be requested.

It is best to discuss with your account to determine what tax implication will apply to you.

We recommend it. A lawyer and an accountant might be helpful and are always suggested, but not required. Many transactions conclude successfully without one. If you’re more comfortable using a lawyer and or accountant, we can recommend a few who are experienced.