How Do I Buy or Sell a Business? Step-by-Step Process

The steps in a business sale or purchase

Buying or selling a business generally moves through the same sequence whether the parties are in Ontario, Alberta, or dealing with a federally incorporated company. What changes between jurisdictions is which specific rules attach to individual steps, not the shape of the process itself.

1. Decide what is being sold: the company’s assets, or the shares of the corporation that owns them.
2. Sign a letter of intent (LOI) setting out price, structure, and key conditions.
3. Conduct due diligence on the target business’s finances, contracts, and obligations.
4. Negotiate and sign the purchase agreement.
5. Obtain any required corporate approvals, including shareholder approval where the law requires it.
6. Address what happens to employees who will continue with the business after closing.
7. Close the transaction and complete any post-closing registrations or filings.

Each step is expanded below, with the specific legal rules that are confirmed for this article flagged by jurisdiction.

Before you start: know what you’re actually buying or selling

Before any offer is made, the parties need to be clear on the basic structure: is this an asset purchase (the buyer acquires specific assets and liabilities of the business) or a share purchase (the buyer acquires the shares of the corporation itself, taking on the company as a whole)? This decision shapes almost everything downstream, including which contracts need to be reassigned, which approvals apply, and what happens to existing employees. The choice between asset and share structures carries tax and liability consequences that are outside the scope of what this article can confirm; a lawyer or accountant is the right resource to work through that decision on the specific deal.

Step 5: Corporate approval to sell the business’s assets (federal rule)

If the corporation being sold from is federally incorporated under the Canada Business Corporations Act, a sale, lease, or exchange of all or substantially all of the corporation’s property, other than in the ordinary course of business, requires approval of the shareholders by special resolution. A special resolution is a vote that typically requires a higher threshold of shareholder support than an ordinary business decision. This means a board of directors cannot unilaterally approve the sale of the whole business (or nearly all of it) without bringing it to the shareholders first.

This rule applies specifically to federally incorporated corporations under the CBCA. Whether Ontario’s Business Corporations Act or Alberta’s Business Corporations Act contain an equivalent requirement for provincially incorporated companies was not verified for this article. Anyone selling the assets of a provincially incorporated business should confirm the applicable requirement under the relevant provincial Act before assuming shareholder approval is or isn’t needed.

Step 6: What happens to employees (Ontario rule)

When a business, or part of a business, is sold in Ontario and the buyer employs an employee who worked for the seller, that employee’s employment is deemed not to have been terminated or severed for purposes of the Employment Standards Act, 2000. Their length of service with the seller counts toward their service with the buyer. This matters because entitlements such as notice of termination and severance pay under the Act are calculated based on length of service, so a buyer who keeps an employee on doesn’t get a “clean slate” on that employee’s tenure.

This continuity rule is confirmed here for Ontario only. Alberta has its own employment standards legislation, and whether it contains an equivalent provision was not verified for this article. Anyone buying or selling a business in Alberta with continuing employees should check the current Alberta Employment Standards Code or confirm the position with a lawyer before assuming the Ontario rule applies the same way.

Step 7: Closing the deal

Closing is when the purchase agreement’s conditions are satisfied (financing, approvals, consents from third parties whose contracts are being transferred) and the transaction legally completes: funds move, ownership of assets or shares transfers, and any required registrations are filed. The specific registrations and filings involved (business name registration, corporate registry updates, and similar) depend on the structure of the deal and the jurisdiction of incorporation, and were not independently verified for this article.

What this article does not cover

This article confirms two specific legal points: the federal CBCA shareholder-approval requirement for a sale of substantially all of a corporation’s assets, and the Ontario ESA rule on continuity of employment when a business is sold. It does not confirm (and readers should not assume) positions on: GST/HST treatment of asset sales, the status of bulk sales legislation in Ontario or Alberta, Ontario’s or Alberta’s own Business Corporations Act provisions on asset sales, or Alberta’s employment standards position on continuity of employment. These are exactly the kind of deal-specific questions where confirming the current, applicable provision (or getting advice from a lawyer or accountant) matters before signing anything.