How to sell a business without a broker in Ontario

Many Ontario owners sell their business without a broker. Here is how it usually works, step by step, in plain words.

Why some Ontario owners sell without a broker

A broker can help with marketing and finding buyers, but many charge a commission on the sale. BDC says commissions are typically around 12% for deals under $1 million. Some owners already know a likely buyer, such as a staff member, a competitor, a supplier or a customer. Others simply prefer to stay in control. You can see a rough comparison with our broker fee guide.

The steps

1. Decide your timing and goals. Most sales take months, not weeks. See how long it usually takes.
2. Gather your records. Three years of financial statements and tax returns, HST filings, your lease, key contracts, and an equipment list. Our documents checklist covers the rest.
3. Get a rough value. Try our free estimate, then ask your accountant or a valuator for a firmer figure.
4. List privately. List free without showing your name or exact town.
5. Use a confidentiality agreement before sharing details with a buyer. See NDAs when selling a business.
6. Check the buyer is serious. Ask for proof of funds or a financing letter.
7. Agree the main terms in a letter of intent, reviewed by your lawyer.
8. Due diligence. The buyer checks your records, debts and contracts.
9. Your Ontario lawyer prepares or reviews the purchase agreement and any lease assignment or property transfer.
10. Close and hand over. Plan the training and transition early.

HST on an Ontario business sale

Ontario uses the harmonized sales tax (HST). In an asset sale, HST can apply to the equipment and other assets you sell. When a buyer takes over all or most of what is needed to run the business, the buyer and seller can sometimes file a joint election with the CRA (form GST44) so no tax is collected on those assets. In a share sale, the buyer buys your company's shares instead, which works differently. Your accountant can tell you which applies. For more, see asset sale vs. share sale and taxes when selling a business.

Leases and property in Ontario

Many Ontario businesses rent their space. Check early whether your landlord must approve a new tenant, and read our guide to your commercial lease when selling. If you own the building or land, the property part of the sale should be handled by lawyers on both sides, and land transfer tax may apply to the buyer. We do not give real estate advice.

Staff and non-competes

If you have employees, think about what you will tell them and when. Our guide on what to tell staff can help. Ontario bans most non-compete agreements in employment, with an exception for certain sales of a business. See non-compete clauses when selling and ask your lawyer.

Free help in Ontario

Ontario's Small Business Enterprise Centres offer free consultations, and many list succession planning among their services. Your accountant can also explain the tax side of selling.

Selling elsewhere? Read how to sell in BC without a broker or how to sell in Alberta without a broker.

For the full Canada-wide steps, read How to sell your business without a broker in Canada.