Does a seller have to fix things before closing a business sale?

A sale does not come with a statutory repair list in the sources cited on this page. What a seller must deliver is whatever the purchase agreement and its closing conditions say. The closing guide walks through that day. This page covers items that regulators attach to a sale, which are worth settling before the closing date.

Workers’ compensation accounts

Ontario’s WSIB says a valid purchase certificate verifies the seller has coverage and no outstanding debts on the account, and that the request must be made before the date of sale. Saskatchewan’s WCB says that if a business sells its assets, the seller has not paid the final account balance and the purchaser did not obtain a clearance certificate, the WCB can apply a sale levy to the purchaser’s account. It adds that the levy can be charged back to the seller or withheld from final payment in the sale. An unpaid balance can therefore come out of what the seller receives.

Payroll and wages

If the seller’s payroll account will close after the sale, the Canada Revenue Agency says all payroll source deductions must first be remitted and the final payroll information returns filed. British Columbia’s Employment Standards Branch says that when a seller terminates an employee before the sale, outstanding wages or compensation are the seller’s responsibility. Quebec’s CNESST says labour standards claims not settled before a change of owner are not cancelled.

What to ask before you list

Ask the buyer’s lawyer for the draft closing conditions early, and list every condition that depends on something the seller must do. For each, confirm who receives the document, how long it stays valid and what happens if it is late. Whether to repair equipment, premises or records is something to settle in the negotiation, and should I fix problems before selling looks at that side.