Do business brokers need a licence in Canada?

Anyone asking whether a business broker needs a licence in Canada is really asking two things: which province the sale falls under, and whether the sale includes real estate. The two provincial regimes cited here, Ontario’s and British Columbia’s, both reach some business sales through their real estate laws. This page covers only those two, so the regulator in the province where the business operates is the place to confirm.

Ontario: the Trust in Real Estate Services Act

Ontario’s Trust in Real Estate Services Act, 2002 defines “real estate” to include leasehold interests and businesses, whether with or without premises, and fixtures, stock-in-trade and goods connected with the operation of a business. The Act says no person shall trade in real estate as a brokerage unless registered as a brokerage. “Trade” includes an act, advertisement or negotiation in furtherance of a disposition or acquisition. Section 5 then lists exemptions from registration, subject to prescribed conditions, so whether a particular person is exempt is a question about that section and the regulations.

British Columbia: it depends on how the sale is structured

BC Financial Services Authority (BCFSA) says a business sale may be completed as an asset sale or a share sale, and that it is important to understand when a real estate licence is required. Its guideline says that when a business sale includes a trade in real estate or real estate services, the transaction is governed by the Real Estate Services Act unless the Regulation provides an exemption from licensing. Its consumer guide says that when a company sells 100 per cent of its shares and the business owns or leases no real property, a licence is not required to facilitate the transaction. Its guideline adds that business sales often include a trade in real estate, such as the sale of real property or the transfer of a lease, and that no licensing is required for an asset sale with no real estate component.

Questions to put to a broker

• Which province’s rules apply to this business, and is the broker registered or licensed there?
• Does the sale include real property or a lease transfer, and does that change who may act?
• Is the deal an asset sale or a share sale?
• How can you confirm the broker’s registration or licence with the regulator yourself?

For how brokers fit into a purchase more broadly, see Can I buy a business without a broker?.