Buying a limousine and black car service in Canada

A limousine company looks simple from the outside: vehicles, drivers, bookings. What you are really acquiring is a set of permissions, relationships and assets that have to stay in working order when the person who assembled them leaves. Begin with whether you can operate it at all, because a company you cannot lawfully run is a pile of vehicles. Then ask the questions a seller may not think to answer unprompted.

Check what you must qualify for

In British Columbia, the Passenger Transportation Board lists the transferee’s attachments for a regular transfer: a balance sheet (personal net worth statements if the transferee is a sole proprietor or partnership) and criminal record checks for any sole proprietor, partners, or the company’s chief executive officer and general manager. In Québec, the Act respecting remunerated passenger transportation by automobile says a qualified driver or a qualified automobile is one either authorized by the Société de l’assurance automobile du Québec or registered with the operator of a transportation system authorized by the Commission des transports du Québec. Elsewhere, find the city or provincial body and ask what it needs from a new owner before you make an offer.

What a good one looks like

Ask the seller to show where the work comes from. Useful things to look for are bookings that are recorded in a system and not on the owner’s phone, accounts that have been with the company across more than one season, chauffeurs who have been on the books long enough to show a history, and vehicles whose records match their condition. Ask the seller to explain the weakest month.

Questions to put to the seller

Ask which accounts are tied to the seller personally, and test the answer by speaking, with permission, to the people who book. Ask whether any chauffeur has had a safety or driving-record issue, whether any vehicle is near the end of its useful life, and whether the owner drives paid trips that the financial statements do not show as wages. Ask what the seller would say if the licensing authority refused to approve you.

Drivers decide whether the business keeps running

Find out how each chauffeur is engaged. The Canada Revenue Agency says an employee generally works under the direction and control of the individual or business who hired them under a contract of service, and that a self-employed worker is not under the payer’s direction or control, so ask your accountant whether the current arrangements match how the drivers actually work. Then ask which drivers intend to stay. If the licensing regime requires each driver to hold their own permit, confirm that each one currently does.

Look at the vehicles as a buyer would

Ask for a list of every vehicle with its year, model, mileage and condition, and who holds title or a lease. Have a mechanic you trust inspect them, and ask when each would need replacing. A fleet that looks polished at a showing can hide deferred work. Then work out what the fleet would cost to keep at the standard clients now expect, because that figure belongs in your thinking about the price, whatever the seller’s asking number is.

Ask also how bookings are taken and dispatched. Ask whether the company uses a booking and dispatch system or runs on the owner’s texts and memory, and treat the system itself, including its data and customer records, as part of what you are buying.

Think about the first ninety days

Before you make an offer, picture the first weeks under your ownership. Who answers the phone, who schedules the chauffeurs, and who calls the largest clients to introduce you? Ask the seller what role they will play after closing and for how long. If the seller wants to leave immediately, ask what that does to the accounts, and ask for the introductions to be made before closing where the seller is willing.

Ask what the licence cannot do

In British Columbia, a transferred licence carries its conditions: the Board’s page says all terms and conditions attached to the licence are transferred, and a single term and condition cannot be transferred on its own. Read them against your plans. If you intended to add vehicles, change the service or move into another area, find out whether the licence allows that or whether you would have to apply separately.

• Your own eligibility to hold the licence or permit, in writing from the issuing authority.
• Whether the licence transfers, needs a new application, or is capped, and what that does to the fleet size you were promised.
• Which accounts are the company’s and which are the owner’s personal relationships.
• The age and condition of each vehicle, and who owns or leases it.
• The driving and safety record of every chauffeur you plan to keep.

If the structure is an asset purchase, does a buyer need its own licence before the sale closes is a good place to start your list of questions for the licensing authority.