What do buyers ask for first, and how do I prepare?

BDC says buyers want to understand your financial performance, to confirm that the business has a solid track record that will continue. Preparing means having the documents behind that record accurate and ready before the first request arrives. The sections below cover what to gather, starting with the financial records and ending with a point on personal information that is easy to miss.

Financial records first

BDC advises reviewing your records with your accountant so they are up to date, interim statements are accurate and projections are realistic. It also notes that an accountant can help prepare year-end and interim statements, projections and other documents buyers typically ask to see during due diligence. The CRA describes records as all of your accounting and other financial information documents, and its guidance covers GST/HST and payroll records, so confirm those are complete too.

Corporate records

A CBCA corporation must keep records that include its articles and by-laws with all amendments, any unanimous shareholder agreement, minutes of shareholder meetings and resolutions, and a securities register (s.20(1)). Section 20(2) adds accounting records and directors’ minutes. Section 21.1 adds a register of individuals with significant control for the corporations it applies to. A provincial corporation follows its own statute, so ask your lawyer what yours must keep.

Contracts, leases and personal information

BDC suggests reviewing contracts, leases and business agreements and updating them if needed. You may not resolve every issue, but it helps to show a buyer a plan. If the files hold employee or customer personal information, PIPEDA s.7.2(1) lets parties to a prospective business transaction use and disclose it without the individual’s knowledge or consent if, among other conditions, an agreement requires the recipient to use it solely for the transaction, protect it with appropriate safeguards, and return or destroy it within a reasonable time if the deal does not proceed. Under s.7.2(4), this does not apply to a transaction whose primary purpose or result is acquiring or disposing of personal information. Ask your lawyer to put that agreement in place before anyone opens the files.