Checklist
Trades business buyer checklist
A trades business buyer checklist covers whether the trade licence can actually move with the sale, the condition and ownership of the vehicle fleet, the signed contract backlog, warranty exposure on completed jobs, and the WSIB-style safety record — the items that decide whether a plumbing, electrical, HVAC or contracting business keeps running under new ownership.
This checklist covers what to verify before buying a Canadian trades business — plumbing, electrical, HVAC, roofing or general contracting. Use it alongside the general buyer due diligence checklist, once a target business is identified and before an offer is finalized, because several of these items take time to confirm and can change the price or the deal structure.
Confirm the licence actually transfers with the business
Confirm whether the trade certification or master licence is held by the corporation or personally by the current ownerA red flag is a business built entirely around a single individually held ticket — a master electrician or plumbing licence — with no other certified staff who can carry the qualification forward.
Ask whether any staff hold their own trade certification or Red Seal endorsement, and confirm they intend to stay after the saleA business with no certified staff besides the departing owner may not legally be able to keep operating from closing day until a new qualified person is in place.
Confirm any municipal contractor registration or business licence tied to the trade is current and check what re-registration a change of ownership triggersSome municipalities treat a change of ownership as a new registration, which can create a gap if it is not started well before closing.
Inspect the fleet, tools and equipment
Physically inspect service vehicles and major equipment and request maintenance and service logs for eachEquipment the seller describes as 'still fine' but with no documented service history often needs replacing sooner than the asking price assumes.
Confirm which vehicles and tools are owned outright, leased, or financed, and get payout figures for anything encumberedA fleet that looks like an asset on paper can carry lease obligations or equipment loans that reduce what is actually being acquired free and clear.
Run a PPSA search against the corporation to check for registered security interests against vehicles or equipmentAn unregistered or undisclosed lien against a truck or a piece of equipment can surface after closing as a claim the new owner did not expect.
Review the contract backlog and warranty exposure
Get a full list of signed but unstarted or in-progress jobs, with contract values and expected completion datesA backlog that looks strong on paper but is mostly informal verbal commitments gives a buyer far less certainty than a file of signed, transferable contracts.
Ask for a history of warranty claims on completed work and confirm how outstanding warranty obligations get handled after closingWorkmanship and materials warranties on jobs completed before the sale do not disappear at closing, and an undocumented warranty history hides how much exposure is being inherited.
Confirm whether key general contractor or property manager relationships are documented in writing or depend entirely on the owner personallyA trades business that wins most of its work through the owner’s personal relationships with a handful of general contractors can lose that pipeline the moment the owner steps back.
Ask how holdback amounts under construction lien legislation are tracked and confirm none are past due for releaseAn unreleased or mismanaged holdback on a completed job is money the business is owed, or money it may still owe, and either way it needs to be accounted for in the deal.
Check safety, insurance and staffing risk
Request a WSIB clearance certificate, or the equivalent workplace-safety-insurance confirmation for the province, and check it is currentWSIB is Ontario’s system for confirming a business owes no outstanding workplace-safety premiums; other provinces run their own equivalent boards, and a lapsed clearance is a red flag worth chasing down before closing.
Ask for the history of any workplace safety incidents, orders or investigations involving the businessA pattern of safety orders points to a bigger operational or supervision issue than a single isolated incident does, and it is worth asking directly why it recurred.
Confirm current liability and, where the business requires it, bonding coverage, and ask whether any claims have been madeA trades business that regularly bids on projects requiring bonding can lose access to that work if its bonding history or capacity does not carry over cleanly to new ownership.
Confirm whether any subcontractors are functioning like employees and review how that classification is documentedA worker treated as a subcontractor who is actually supervised and scheduled like an employee can expose the business to a misclassification claim that follows the new owner.
Sources
Every item on this checklist traces to a primary source. Links were last confirmed on the dates shown.
- 01Canada Revenue AgencyGovernmentSelling a business
- 02Workplace Safety and Insurance BoardRegulatorClearance Certificate in Construction
- 03Treadstone LawLegal commentaryEquipment and Asset Condition Checks Before Buying a Business in Ontario
- 04Treadstone LawLegal commentaryKey-Person Dependency
- 05Treadstone LawLegal commentaryCustomer Concentration Risk: Why It Can Sink an Ontario Business Sale
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.