1. Decide what you are actually buying
A business purchase in BC is either an asset purchase or a share purchase. In an asset purchase you buy specific things: equipment, inventory, the lease assignment, the trade name, customer lists and goodwill. The seller's company keeps its own history, debts and tax exposure. In a share purchase you buy the corporation itself, with everything it owns and everything it owes, including liabilities you may not know about yet.
Most small BC businesses under a few hundred thousand dollars change hands as asset sales because the buyer can pick and choose what comes along. Share sales are common when a licence, lease or contract cannot be reassigned easily, or when the seller wants the lifetime capital gains exemption on qualified small business shares. The choice affects PST, income tax for both sides, and how much diligence you need, so settle it with your accountant and lawyer before you write an offer.
2. Set a budget that includes more than the price
The asking price is the start of the number, not the end. Add working capital for the first months, PST on taxable assets (see step 7), legal and accounting fees, licence transfer fees, a lease deposit if the landlord requires a new one, franchise transfer fees where they apply, and a reserve for the equipment that will fail in the first year.
Our acquisition affordability calculator lets you enter the price, your down payment and the cash flow you believe the business produces, and shows the monthly debt service and cash left after it. Use it early, before you fall in love with a listing.
3. Search the whole market, then screen hard
Every BC business listed through a REALTOR on the MLS system appears on this site, updated nightly from the CREA Data Distribution Facility, and realtors can also post exclusive listings that are not on the MLS. Browse by category (for example restaurants, cafés, franchises, salons) or by city, and save a search so new listings reach you by email.
Screen listings on facts you can verify: the lease term and rent, whether the sale includes the property, how long the business has been listed, and whether the remarks state training, seller financing or a franchise relationship. Our listing pages extract those statements from the agent's own description and show the exact sentence they came from, so you can see the evidence rather than a checkbox.
4. Make contact and sign a confidentiality agreement
Many going concerns are listed confidentially: no address, no business name, sometimes no photos of the storefront. That is normal. Staff, suppliers and customers usually do not know the business is for sale, and the seller is protecting it. Never visit and ask staff about the sale. Contact the listing agent through the form on the listing page, sign the non-disclosure agreement they send, and you will receive the information package.
5. Read the numbers before you negotiate
Ask for at least three years of financial statements or tax returns, the current year's monthly sales, the lease, the equipment list, the licence documents and payroll details. Reconcile the sales figures the seller quotes against bank deposits, point-of-sale reports and the GST returns filed with the Canada Revenue Agency. Add back the owner's salary and personal expenses only when you can see them in the statements.
If the seller will not provide statements, treat the price as unsupported. A business that genuinely earns what the listing claims can show it.
6. Make a conditional offer
In BC a business purchase is normally written up by the buyer's REALTOR or lawyer as an offer to purchase with conditions (subjects): financing, a satisfactory review of the financials, landlord consent to the lease assignment, transfer of any licences, and a training period. The deposit is held in trust and returned if a condition is not met. Keep the condition period long enough to actually do the work in step 8, usually three to six weeks for a small business.
7. Understand the taxes on the deal
Provincial sales tax applies to the taxable business assets in an asset sale: affixed machinery, business equipment such as vehicles, shop equipment and appliances, computer hardware, shelving and display equipment, and software. Inventory bought for resale is exempt when you give the seller your PST number or an exemption certificate, and real property, goodwill, accounts receivable, franchise fees and shares are not subject to PST. If the seller is registered to collect PST they must charge it on the taxable assets; if they are not, you must self-assess and remit it yourself.
Before closing, obtain a PST clearance certificate. The province issues it, with the seller's consent, to confirm the seller has paid all outstanding PST, penalties and interest. Without it you become liable for whatever the seller still owes. GST usually applies too, although buyers and sellers who are both registrants can often elect to have no GST charged on the sale of a business as a whole; your accountant will confirm whether the election is available for your deal.
8. Due diligence, in the order that finds problems fastest
Start with the lease, because a business without a secure premises is worth much less: remaining term, renewal options, rent escalations, demolition clauses, and whether the landlord consents to assignment and on what terms. Then licences and permits: liquor, food premises, child care, fuel, passenger transportation or cannabis licences each have their own regulator and their own transfer process, described in the category guides on this site. Then the equipment, then employees and their accrued vacation, then supplier and franchise agreements, then online reviews and the competition you can see from the door.
Our category-aware due diligence checklist on every listing page lists the items specific to that type of business and can be printed for your meetings.
9. Arrange financing
Buyers combine savings, a Canada Small Business Financing Program loan through their bank or credit union, a Business Development Bank of Canada loan, and in many small deals a vendor take-back, where the seller finances part of the price and is paid over time. Lenders want the same financial statements you asked for in step 5 plus your own net worth and a plan for the first year. See our financing guide for the current program limits.
10. Close and take over
At closing your lawyer confirms the lease assignment, licence transfers or applications, the PST clearance certificate, a bill of sale for the assets, the inventory count on the day, and the release of any liens registered against the equipment in the BC Personal Property Registry. Agree in writing on the seller's training period and on a non-competition covenant for a reasonable distance and time. Then notify the CRA, WorkSafeBC, your municipality's business licence office and your suppliers that the business has a new owner.
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Frequently asked questions
How long does it take to buy a small business in BC?
From accepted offer to closing, six to twelve weeks is typical for a small asset purchase. Licence transfers can add time: a liquor licence transfer, for example, takes weeks to be deemed complete and several months to finalize, although the business can keep operating in the meantime.
Do I need a lawyer and an accountant?
Yes. The purchase agreement, lease assignment, licence applications and the asset versus share decision all have legal and tax consequences that a REALTOR cannot advise on. Budget for both from the start.
Can I see revenue and cash flow on the listings here?
The MLS data feed does not carry financial statements, and we never invent them. Listing pages show exactly what the agent wrote, plus any facts we can extract from that text with the source sentence. Financials come through the agent after you sign a confidentiality agreement.
Sources
- Province of BC: Buying and selling a business (PST rules and clearance certificate)
- Canada Small Business Financing Program: 2022 program changes
- BC Personal Property Registry
This guide is general information for British Columbia, not legal, tax or financial advice. Rules change; confirm current requirements with the regulator linked above and with your own lawyer and accountant before you buy.