Questions and answers about Selling a business

Do I cancel my Business Number (BN)?

What happens to my Payroll account?

What happens to my GST/HST account?

Is there a change of ownership?

What is the value of the inventory and other assets?

Can I claim a capital gains deduction?

Has a restrictive covenant been given?

Do I cancel my Business Number (BN)?

If the business you are selling has a Business Number (BN), you may have to cancel your BN. It is important to contact your tax services office.

What happens to my Payroll account?

If the business you are selling has employees, you must close your payroll account.

What happens to my GST/HST account?

If the business you are selling has a GST/HST account, you must close the account by advising your tax services office.

Is there a change of ownership?

When the owner of a sole proprietorship or one of the partners in a partnership or one of the members of a corporation's board of directors changes, it is important that you contact your tax services office.

Depending on your business structure, it could trigger a legal name change or require the registration of a new Business Number (BN) and CRA accounts.

What is the value of the inventory and other assets?

If you are selling your business or part of your business, you generally set an amount for the entire business. In some cases, your sales agreement sets out a price for each asset, a value for the inventory of the company and, if applicable, an amount that can be attributed to goodwill.

Depending on your situation, you may have a recapture or a terminal loss of capital cost allowance (CCA) on the sale of your assets.

You may also have sold an eligible capital property. If this is the case, you have to subtract part of the proceeds of disposition from your cumulative eligible capital (CEC) account. For more information, see eligible capital expenditure.

Can I claim a capital gains deduction?

If you realized taxable capital gains from the disposition of qualified farm property or qualified small business corporation shares, you may be eligible to reduce your taxable income by claiming a capital gains deduction.

Has a restrictive covenant been given?

If you are selling a business and a restrictive convenant is part of the selling agreement, see Restrictive covenant.

Related topics

• Closing accounts
• Payroll
• What should you do if an employee leaves?
• Business structure
• GST/HST and selling a business
• You are deregistering your GST/HST account because you are closing your business
• Sole proprietorship
• Partnership
• Corporation
• Line 9947 - Recaptured capital cost allowance
• Line 9948 - Terminal loss
• Claiming capital cost allowance (CCA)
• What is?
• Eligible capital expenditures
• Line 254 - Capital gains deduction
• Restrictive covenant