Buying a septic services company in Canada

Someone evaluating a septic company is looking at a business that may need approvals, trucks and a crew to operate. A good one has paperwork that holds up, trucks that can keep working and customers who stay with the company. Before any of that, the buyer has to ask a plainer question: what must I hold personally or through my own company to do this work on day one? Registrations and approvals may be tied to the seller, so ask early whether the deal can work as structured. The CRA adds a practical point: a change of owner may require registering a new business number and new program accounts, and a new owner can’t continue using the old business number. Plan your own accounts, insurance and banking before closing day, so the company can bill and pay from the first day.

What you must qualify for yourself

Installation, hauling and disposal may each need their own approval, so ask which body issues each one in the province where the company works. Ask the local building department or delegated approval authority what installer registration requires of a new owner, and ask the environment ministry what hauling requires. In Ontario, the Ministry of the Environment, Conservation and Parks says section 27 of the Environmental Protection Act requires an Environmental Compliance Approval for the transportation, management or disposal of certain types of waste, and describes amending an approval. Ask what the ministry requires to amend one for a new owner. Do not assume anything transfers. Where a registration is held by a named person, ask whether you or someone you employ can hold it, how long the process takes, and whether you can operate in the meantime. Ask the seller to agree that the deal depends on those approvals.

Truck operating rules

Ontario states that if you operate a commercial vehicle there, you must have a valid CVOR certificate, and that the program monitors operators’ safety records. It also lists CVOR changes to notify the Ministry of Transportation about immediately, including changes in corporate officers. Transport Canada notes that provincial and territorial regulations govern the operation of the commercial truck industry, except for the rules its Motor Carrier Division sets for the safe operation of federally regulated (extra-provincial) carriers, which carry goods across a provincial or international boundary. If the company’s trucks cross provincial lines, ask which rules apply. Ask to see the safety record of the operator you are about to become, and ask who at the company would be responsible for keeping it in order after closing.

What a good one looks like

Look for current approvals, a route with dated service records, complete disposal documentation and trucks whose maintenance file is clean. Look also at who owns each relationship. Customers who deal with the company and a dispatcher are different from customers who call one person’s mobile. Ask who the repeat customers are and how long each has been served. Check whether service is booked by a schedule the company controls or by the customer calling when something goes wrong, because that determines how much planning you can do. Ask also how new installation work is found, and whether it comes through a small number of builders.

What the seller may not volunteer

Ask directly about complaints about failed systems, groundwater concerns, orders from a regulator, equipment due for replacement and any work done without permits. Ask whether installation records exist for every job. Ask which customers or builders account for the revenue and whether any have said they will leave. Do not wait for these to be raised: put each question in writing and keep the answers. Ask staff, with the seller’s permission, what they expect to do after the sale, since drivers and installers may carry the company’s knowledge of the route.

Who else is buying

Ask the seller who else has looked at the business and why those discussions ended. If you are an individual buyer, ask whether you can run the company with the people already there, and what you would need to hire.

Equipment and its condition

The trucks and excavation machines may be most of what you can see and touch. Have a qualified mechanic inspect them before you commit, and ask for service records for each unit. Ask which units are owned and which are leased, what is owed on each, and whether the seller expects to keep any equipment out of the sale. A tank, pump or hose that fails mid-route can cost service days as well as repair money, so ask how the company handles breakdowns and whether it has a backup unit or an arrangement to rent one. Ask also what the company spends yearly keeping the fleet working, and where that spend appears in the financial statements.

Staff and customers after the sale

Ask which employees hold the knowledge of routes, customers and installation work, and whether they hold any approvals the company depends on. If the company uses subcontractors, ask how each is engaged and whether they would continue. Meet the key people before closing if the seller agrees. Ask what the seller will do to help customers and builders through the change, and for how long. A seller who stays for a defined handover period can help here, but agree its terms in writing.

• Confirm what registrations and approvals you personally need and which can be amended
• Check the commercial vehicle safety record and the registration the trucks operate under
• Request the complete disposal and installation records
• Ask about complaints, regulator orders and past-work claims
• Learn which customers and builders the revenue depends on