Changes in your business structure can be disruptive when you don’t know the right steps to take. All businesses face changes related to ownership and management.
Being prepared for these and other shifts can protect your interests and ensure a smooth transition for the entire organization.
Business owners should have the plans in place to navigate changes in ownership. Knowing how to transfer ownership of your business prevents unwanted issues while maximizing the benefits of the transition.
What’s your business worth?
Companies must determine the market value of their business in advance to ensure that a fair market price is offered and received.
The market value of any business can be determined by considering all of the existing assets held by the organization along with the potential for future growth.
The current level of revenue and profit must also be considered. In many cases, a company’s reputation within its industry can also influence its overall value.
Key steps for transferring ownership
In order to transfer ownership for Sole Proprietorships (Master Business Licences), business owners must close all Canada Revenue Agency (CRA) accounts and cancel the current Sole Proprietorship. The new owner will be required to set up a new business either as a Master Business Licence or an Incorporporated company, a new business number (BN) will need to be obtained by the new business owner with Canada Revenue Agency (CRA).
You should perform an inventory of your business in order to execute a transfer of ownership. This provides you with all of the information related to your existing interests so that you can transfer them appropriately.
Sale of a business must be done through the use of a sales contract. The level of complexity for this agreement will vary based on the size and nature of your business.
Transfers of titles and deeds must be considered when transferring ownerships. Titles related to company vehicles will need to be obtained and processed during this transition.
Transferring ownership may also require documentation according to local regulations. Any changes must be reported in annual reports. In some cases, businesses will need to file a Certificate of Amendment in order to reflect changes in ownership.
Shareholder agreements should be updated when stock shares are transferred over to a new business owner.
There are many factors to consider when transferring ownership of your business. We help business owners like you move through the process easily in order to avoid any unwanted issues.
Knowing how to transfer ownership ensures that all legal obligations are met and that you maximize your return on investment.
Contact Us Today to learn more about transferring ownership of your business.
Laura Harvey is an entrepreneur herself as the owner of Ontario Business Central Inc. Her passion has always been about supporting the entrepreneurial spirit and advancement within Canada.
Laura authors in-depth blogs for Ontario Business Central assisting entrepreneurs and business owners to start, manage and grow their businesses. She has almost 30 years of expertise as a corporate specialist and 25 years of being an entrepreneur. Laura has the unique position of supporting a community that she also belongs to. She walks the walk right along with you.
You can find Laura on Linkedin and Twitter.