What changes hands when I sell my online shop business in Canada?

People asking whether they can sell an Etsy shop are really asking two things: does the platform allow it, and what is the buyer actually paying for. Only the platform’s own terms answer the first, so read them before you list anything. This page covers the second question, using the Canadian rules a seller of an online shop business can run into.

Write down what the buyer is getting

An online shop is a bundle. It can include product listings, photos and written descriptions, designs, a domain name, social media accounts, supplier arrangements, stock and customer records. Check which items the platform’s terms tie to the account. Then list each item in the agreement, say who owns it, and say how it will be transferred.

Copyright in designs, photos and text

If you own copyright in your designs, product photos or listing text, the Copyright Act allows the owner to assign the right, either wholly or partially. The Canadian Intellectual Property Office describes an assignment as the transfer of some or all of your rights to another party. Under section 13(4), an assignment is valid only if it is in writing signed by the owner, or by the owner’s duly authorized agent. Put the assignment in a signed document of its own rather than relying on a platform transfer step.

GST/HST on the sale

On its page about closing a GST/HST account, the Canada Revenue Agency says a seller may be able to jointly elect with the purchaser to have no GST/HST payable on the sale of a business or part of a business, if the conditions are met. The election is made on form GST44. CRA says it cannot be used if you sell only individual assets, or if you are a registrant and the recipient is not. The purchaser must acquire a set minimum share of the property necessary to carry on the business, a condition that comes from section 167 of the Excise Tax Act. An accountant can confirm whether it fits.

Closing your GST/HST account

If you decide to close your GST/HST account, you must notify the CRA and provide the reason for closing it. Selling your business is one of the reasons the CRA lists. The CRA also says that, once the account is closed, it considers you to have sold the property you held for your commercial activities and collected tax on it, so ask your accountant about timing relative to closing. A related page, buying an online course business in Canada, looks at the buyer’s side of a digital business.