Can I sell just one location and keep my others?

Selling one location is possible because several rules expressly cover the sale of part of a business. Whether yours can be done cleanly depends on whether the location can stand alone: its premises, staff, customers, permits and suppliers. This page covers independent businesses. Franchisees also have a franchise agreement to check, covered in selling one franchise location.

How the law treats part of a business

Section 167 of the Excise Tax Act covers the supply of a business or part of a business, and the CRA says the GST/HST election may be available when you sell part of your business, though not when you sell only some assets (see section 167 when only some assets are sold). Ontario’s Employment Standards Act, 2000 says that if an employer sells a business or a part of a business and the purchaser employs an employee of the seller, the employee’s employment with the seller counts as employment with the purchaser for length-of-service calculations, subject to a time limit for hiring. British Columbia’s Employment Standards Branch applies its sale-of-business rule to the disposal of all or part of a business.

What has to be separated first

• The premises: what the lease for that site says about transfer and whether the landlord must approve it (see landlord approval delays).
• The lender: Ontario’s Personal Property Security Act says that where collateral gives rise to proceeds, the security interest continues as to the collateral unless the secured party authorized the dealing free of it, so the site’s assets stay subject to a lender’s security over all of the company’s assets unless the lender has authorized the sale free of it.
• Shared contracts and people: suppliers, software, insurance and staff who work across sites all need to be allocated.
• Permits and licences tied to the site: check whether they transfer or must be reissued to the buyer.

What the price covers

The CRA notes that when you sell your business or part of it, you generally set an amount for the entire business, and in some cases the agreement may set a price for each asset, the inventory and any goodwill. That allocation matters for tax, so settle which assets, contracts and people belong to the location before you settle the price. Full sale vs partial sale compares the routes.