Online course business due diligence

Due diligence on an online course business looks less like inspecting equipment and more like auditing a set of digital assets and their legal ownership. There is comparatively little to physically verify — a laptop, a subscription list, a platform account — so the real work is confirming that the content, the list and the enrolment revenue are actually owned free and clear, transferable, and as durable as the seller’s numbers suggest before you sign anything final.

What a certification-style outcome claim actually needs behind it

Request confirmation, in writing, that the recorded course content, the course-platform account itself and its full enrolment records are owned by the business being sold and will transfer at closing, not merely licensed to the founder personally. The same goes for the email list and the sales-page copy used to market the course — get these committed to the purchase agreement specifically rather than assumed as part of a general goodwill transfer. Where the course or brand name is registered as a trademark, confirm the registration is current and actually held by the selling entity. And get explicit about what you are not receiving: the founder’s likeness and voice in the existing recordings come with a licence to keep using them as they are, not a right to have the founder appear in anything new, unless that is separately negotiated and priced.

Audit the CASL consent records before you rely on the list

Because CASL governs the launch and cart-abandonment sequences that typically carry most of an online course’s revenue, request the actual consent records behind each segment of the email list — how each subscriber opted in, when, and through what mechanism — rather than accepting a general assurance that the list is compliant. A list with real gaps in its consent trail is a liability you would be inheriting, and depending on how large the gap is, it can mean a meaningful share of the list is not safely usable for continued marketing until it is cleaned up or re-permissioned, which changes both the funnel’s economics and your near-term marketing plan.

Check the sales-page and outcome claims

Review every claim on the sales page and in the ad creative that promises a credential, a certification or a specific income outcome, since these are exactly the statements the Competition Act’s misleading-representations provisions reach. Ask for the evidence behind any outcome claim — testimonial sourcing, completion statistics, refund data — and treat a seller who cannot produce it as a signal that the claim may not survive scrutiny once you are the one making it. A pattern of unsupported claims is not just a legal exposure; it usually correlates with the higher refund rates that erode the revenue you are actually buying.

What a high refund rate actually tells you — and what it doesn’t

A refund rate above what the seller represented is not automatically disqualifying on its own — it needs context. A spike tied to one bad cohort, a platform billing glitch, or a short period of aggressive ad targeting that has since been corrected tells a different story than a refund rate that has been elevated and rising for a year. Ask for refund data broken out by cohort and by acquisition channel rather than a single blended number, because a business with excellent core content and one underperforming traffic source can look worse in aggregate than it actually is — and the fix in that case is cheaper than the fix for a course that genuinely does not deliver.

Registry and data checks

Confirm what personal data the course platform actually collects and retains on students, and check that the seller’s privacy disclosures match what the platform does in practice — this matters under PIPEDA generally and, for any Quebec students, under Quebec’s private-sector privacy law specifically. Where copyright in original course materials has been formally registered, a quick check through the Canadian Intellectual Property Office confirms the registration is current and actually held by the entity you are buying. A standard corporate status and good-standing search on the selling entity, and a check for any outstanding CRA debts, rounds out the registry work — there is little in the way of equipment liens to search in a business this asset-light, so this step goes quickly.

Findings that most often kill this kind of deal

• The founder is unwilling to provide any transition support, and the enrolment data shows revenue is heavily tied to their ongoing personal promotion
• A meaningful share of the course content is materially out of date and would need to be re-recorded before resale is credible
• Refund and chargeback rates are markedly higher than the sales figures initially suggested
• The email list has significant CASL consent gaps that would make continued marketing to it risky