How do I sell my eBay business?

Selling an eBay business means separating what you own from what eBay lets you pass on. If a buyer wants the account, with its feedback and sales history, that request runs into the fact that the account sits under eBay’s terms, not yours. Everything else that makes the business, such as brand, inventory, supplier arrangements and photographs, is yours to sell if you own it. This guide covers what the User Agreement says about the account, how to think about what is actually being sold, and which Canadian tax and intellectual property steps follow.

The seller account needs eBay’s consent

eBay Canada’s User Agreement says you will not transfer your eBay account, including feedback, and user ID to another party without eBay’s consent. So the question of whether you can sell the account is one for eBay, not for you and the buyer alone. Ask eBay what process, if any, it offers for a transfer, and get its answer in writing before you agree a price that assumes the account comes across. If eBay does not consent, settle with the buyer in writing what the deal is without the account.

Be clear about what you are selling

If the account cannot be transferred, what can be sold may be the rest of the business: inventory, the brand and any registered or unregistered trademark, product photos and listing text, supplier and shipping arrangements, customer relationships you hold outside the platform, and your processes. Write the list down and say plainly in the agreement whether the account is included, excluded or conditional on eBay’s consent. Ask a lawyer whether to structure the sale as assets or shares, and which past liabilities the buyer would take on under each.

Your brand is transferable

Section 48(1) of the Trademarks Act says a trademark, whether registered or unregistered, is transferable, either in connection with or separately from the goodwill of the business. If your store trades under a brand name you own, that name can be part of the sale even where the account itself is not. Check who actually owns the mark, whether it is registered, and whether any listing uses a licensed brand, since you can only sell what you own. Your lawyer can draft an assignment that matches the mark.

Photos, descriptions and other copyright

The Canadian Intellectual Property Office explains that an assignment is the transfer of some or all of your rights to another party, and that it can last for the entire term of the copyright or part of it. It also lists ways to register an assignment. If you took the product photographs and wrote the listing copy, your sale agreement can assign those rights. If a photographer or writer made them for you, confirm what you own before you promise them. CIPO describes registering an assignment as something you can do online or by fax or mail; ask your lawyer whether to register yours.

Close or transfer the tax accounts

The CRA says that if the business you are selling has employees, you must close your payroll account. If it has a GST/HST account, you must contact your tax services office to close it, and if it has a business number you might have to cancel it. The CRA adds that you may be able to jointly elect with the purchaser to have no GST/HST payable on the sale, using Form GST44. The CRA says the election cannot be made if you sell only one or more assets of your business, or if you are a registrant and the purchaser is not, so a sale of inventory alone may not qualify. Ask your accountant before you set a price.

Plan the handover of inventory and suppliers

Plan for the store to keep running on the first day after closing. Write down how stock is counted and valued at closing, which suppliers will deal with the buyer and whether they must consent, how open orders and returns are handled, and who answers customer messages during the changeover. Agree how long you will help after closing and what that costs. Ask whether any listings, shipping accounts or payment accounts are tied to you personally, since those may also need their own provider’s consent or a new set-up by the buyer.

Keep records the buyer can check

Be ready to show a buyer what the store has earned and sold. Keep clean exports of your sales history, fee statements, returns and refunds, and the tax filings that cover them. Reconcile them against your bank deposits before you share them, so that the figures a buyer sees match what you can show. Do not hand over account passwords as part of a sale; ask eBay what it permits. Your accountant can help you recast the numbers so that personal or one-off items are shown separately.

• Get eBay’s position on the account in writing before pricing the deal.
• List every asset you are selling and say whether the account is in or out.
• Confirm you own the brand, photographs and listing text you are selling.
• Ask your accountant whether the GST44 election applies and who files it.
• Plan how the CRA accounts will be closed or handed over on the closing date.