Account transfers and sales tax in an e-commerce sale

Two things trip up more e-commerce sales than anything else in the deal itself: the assumption that marketplace and payment processor accounts simply come with the business, and confusion over how sales tax applies once a store sells across provincial or national borders. Both need direct verification — with the platforms involved and with a tax advisor — rather than being assumed from how a previous deal happened to work.

Marketplace accounts are not automatically assignable

Marketplace seller accounts are typically tied to the individual or entity that opened them, and many marketplaces restrict or prohibit simply handing that account to a new owner — though exactly what’s permitted depends entirely on the platform’s current terms, which can change. Before a deal is finalized, both parties should check directly with the marketplace what options actually exist, whether that’s a formal transfer process, opening a new account and migrating listings, or something else specific to that platform. Some sellers assume a simple change of banking and contact details on an existing account amounts to a transfer, when the platform’s own terms may treat that differently, so the assumption needs testing against the actual policy rather than past practice.

Payment processor accounts raise similar issues

Payment processors run their own underwriting and account approval process tied to the specific business and individual that applied, which means a buyer often can’t simply start using the seller’s existing payment account after closing. Buyers should expect to apply for their own merchant or payment processing account well ahead of closing, and should confirm with the processor directly what documentation and lead time that requires, rather than assuming approval happens instantly.

Domain and IP transfers need their own checklist

Transferring a domain name involves both the registrar’s transfer process and updating DNS records, email and any connected services, and it’s worth planning so the store doesn’t go offline or lose email deliverability during the switch. Any trademarks, copyrighted content or proprietary code need a documented, explicit transfer or assignment as part of the sale agreement — ownership shouldn’t be assumed just because the buyer now controls the website.

Cross-border sales tax is a mechanism to understand, not a fixed rule

A store selling to customers outside its home province, or outside Canada, may need to consider sales tax obligations in those other jurisdictions, and the mechanisms for that — registration thresholds, collection requirements, marketplace facilitator rules — vary by jurisdiction and change over time. This is genuinely worth understanding before a sale, but the specifics depend on where the business’s customers are and how the deal is structured, and should be confirmed with an accountant familiar with cross-border e-commerce rather than treated as a fixed rule. A business that has never had to register or collect tax in a particular jurisdiction may still need to reassess that position once ownership, structure or sales volume changes.

Import duties and customs matter for physical goods

If the store imports inventory, or ships products across the border to fulfill orders, duties and customs requirements are part of what a buyer inherits along with the supply chain. Understanding how those obligations currently apply to the specific products and trade lanes involved, rather than relying on general assumptions, is worth doing before closing, since a change in ownership can sometimes trigger a fresh look at import compliance. Even where a change in ownership doesn’t legally require a fresh review, treating it as an opportunity to confirm compliance is a low-cost step compared with the cost of a problem discovered later.

Coordinate the timing of every transfer

Because marketplace, payment processor and domain transfers each run on their own timeline and their own approval process, closing before all of them are actually confirmed can leave a buyer holding a business they can’t yet fully operate. Sequencing the sale agreement so that closing coincides with, or follows, confirmed account transitions — rather than assuming everything will resolve itself shortly after signing — protects both sides from a gap where the store’s revenue is effectively paused.

The sale agreement should spell out every account by name

Because so many of these transfers depend on third-party platforms rather than on the seller and buyer alone, the purchase agreement should list every account, domain and IP asset explicitly, describe what each party is responsible for in getting it transferred, and address what happens if a particular platform won’t permit a transfer at all. A general clause promising “all business assets” leaves too much to interpretation when the actual mechanics run through platforms neither party fully controls.