What happened
Talent Canada ran an interview on legal planning for a business sale, as reported by Talent Canada. It features Julian Franch, a partner in the tax and trusts group at Cassels. His message is that succession planning is a team effort, and the lawyer's part is to structure the owner's corporate affairs to keep tax as low as possible.
Franch says an owner who may sell in five, 10 or 15 years should talk to a tax lawyer as soon as possible. One aim is to multiply the lifetime capital gains exemption across family members, often through a trust. He also stresses up-to-date corporate records. The shareholders on file should match the shares actually issued, and the annual reporting should agree with them.
He describes the main deal choice as a share sale or an asset sale. Sellers usually prefer shares for the tax benefit. Buyers often prefer assets because they avoid existing liabilities. For family businesses, he recommends a family constitution that sets out how the next generation will work together. Buyers can come from anywhere, he says, so owners should use their whole advisory team to find one.
Why it matters if you are hiring
A sale or handover changes who leads the business and who holds the knowledge. Owners who plan five or more years out have time to build a bench instead of scrambling at the end.
That usually means hiring or promoting a general manager, a controller or finance lead who can keep the books and records clean, and operations leaders who can run the plant or office without the owner. Buyers look hard at record quality and at whether the business depends on one person. A tidy finance function and a second layer of management make a company easier to sell.
For family businesses, the next generation may not be ready or willing to take every seat. Planning early shows which roles need an outside hire and which can be filled from within.
One thing to do this week
List the three roles the business could not run without for a month, and name who covers each one today. If any answer is the owner alone or nobody, start scoping that hire or successor now, and ask your accountant whether your share records match what has been issued.
Traverse helps owners and managers across Canada find the finance, operations and management people who make a business ready to hand over, whether the next step is a sale or a family transition.