What happens to GST/HST accounts when a business is sold?

Two different things get confused here. One is the administrative question of what happens to the accounts. The other is whether tax applies to the purchase price itself, which on an asset sale can be a substantial sum and is often avoidable.

The registration belongs to the seller, not the business

A GST/HST number attaches to the legal person registered, so it stays with the seller. In an asset sale the buyer registers separately and the seller closes its account, filing a final return for the period up to the change. In a share sale nothing happens to the registration at all — the corporation continues as the same registrant, which is one of the quiet simplifications of buying shares.

The election that removes tax from the purchase

Where a buyer acquires substantially all of the property needed to carry on the business, and both parties are registrants, a joint election allows the transfer to proceed without GST/HST applying to it. Without the election, tax may be payable on the asset price and then recovered later as an input tax credit — recoverable, but a cash-flow cost at exactly the wrong moment.

It is a joint election with conditions

Both parties have to agree and file, the conditions have to be met, and real property is treated differently. The election is routine in competently handled asset sales and routinely missed in ones where nobody raised it. Whether yours qualifies is a question for your accountant while the agreement is still in draft.

Closing the account is not the end of the obligation

A final return still has to be filed and amounts owing remitted, and the seller may have a liability on property kept out of the sale. Buyers have their own exposure: in an asset purchase, unremitted tax can in some circumstances follow the assets, which is why a clearance or an indemnity belongs in the agreement rather than in good faith.