Sole proprietorship

A main-street seller meets this term when the business is a person, not a company. The CRA says self-employment income is reported on the owner’s income tax and benefit return, and that income may be earned from a business operated as a sole proprietorship or in a partnership. Where the business is incorporated, the CRA sends the reader to its corporation pages instead. With no corporation there are no shares, so a buyer acquires the business’s assets and arrangements.

Ontario and Nova Scotia

Ontario’s Business Names Act says no individual shall carry on business or identify their business to the public under a name other than their own name unless the name is registered by that individual, subject to the exception in subsection 2(5). Nova Scotia’s registry says most sole proprietorships need to register, but an individual using only a personal name does not. This entry covers Ontario and Nova Scotia only; check the rules in the province where the business is.

What to ask

• Under what name the business trades, and whether that name is registered
• Which licences, accounts and contracts sit in the owner’s personal name
• Whether the buyer will register its own name or form a company

See planning succession for a sole proprietorship.