Selling a framing contractor in Canada

An owner who has decided to sell a framing company has a short list of things only they can do, and most of them are about people rather than paperwork. Builders have to be told at the right moment. Crews have to hear a sale is coming without deciding to leave. The books have to show what the work really earns. This guide follows the sequence: first preparation, then confidentiality, then what the workers’ compensation board will want, then what to be ready to show a buyer. It does not cover price, which is the subject of the separate guide on what a framing contractor is worth.

Start with records a buyer can test

BDC says an accountant is important for preparing year-end and interim financial statements, projections and other documents buyers ask to see in due diligence, and that a lawyer familiar with business transitions supplies information and negotiates the agreement. For a framing company, add job-level records: each contract, the builder, the scope, what was billed and what remains. A buyer testing a claim about backlog can only do it against documents. Gather insurance certificates, equipment lists and any engineering sign-offs while there is time.

Decide your own role first

BDC notes that a buyer may insist on a reduced price if the seller cuts all ties, and that a 100 per cent cash-out deal leaves the buyer carrying more risk once the seller is gone. If builder relationships are personal to you, your post-sale role is part of what you are selling. Decide whether you will introduce the buyer to builders, stay on for a period, or leave at closing, and be ready to say so. Not deciding leaves a buyer to guess.

Confidentiality with builders and crews

Plan who learns about the sale, in what order. Think through how builders and how crews would each react if word travelled, and which should hear first. Use a confidentiality agreement before any buyer sees job-level records or builder names, and consider holding the names back until a buyer is serious. Decide in advance how you will answer a builder who asks directly. Keep a simple log of who has seen what and when, so you can show a buyer that the information stayed controlled. See also selling a trades business.

Workers’ compensation standing

Each province runs its own regime. In Ontario, WSIB says that if you sell or buy a business’s assets you should get a purchase certificate, that it may hold the purchaser liable for amounts the vendor owes up to the date of sale without a valid one, and that the request must be made before the date of sale. WSIB also says a share sale does not need one, though the share purchase agreement must still be submitted to it. WorkSafeBC says that if the seller is indebted to it for unpaid premiums, the firm’s assets may be subject to a lien in favour of WorkSafeBC. Bring your account up to date before listing and ask your own board what it requires. WSIB says a purchase certificate is valid for 30 days, so time the request to the closing date rather than asking months ahead. Ask the board, too, what it wants to be told once the sale is done.

Crew arrangements and tax questions

If your framers are paid by the piece, be ready to show how they are engaged. The CRA says status turns on all the facts, not just the intention of the parties, and either the worker or the payer can ask it for a CPP/EI ruling. The CRA also publishes a form, the GST44, to elect that GST/HST not apply to the sale of a business or part of one. Whether you qualify, and how the price is allocated, are questions for your accountant before an offer, not after. Ask also whether any builder agreement needs the builder’s consent to be assigned.

The order of work from decision to closing

A workable order is this. Engage the accountant and lawyer first, since they shape everything else. Clean up the records and the workers’ compensation account. Decide your own role. Put a confidentiality agreement in place before anyone sees builder names. Approach buyers, and think about who they might be: a builder that wants framing capacity in house, another framing contractor, or a regional consolidator. Ask each what it would care about most, such as the crews, the builder accounts or the systems. Plan for a conditional offer, then due diligence, then the closing documents, and keep working the jobs throughout, so that no builder sees a missed schedule in the middle of a sale.

• Job-level records for every open and recent contract, with builder, scope, billing and remaining work
• Insurance, safety and workers’ compensation account status, with any clearance or payment plan
• An equipment list with serial numbers, and a note of what is financed or leased
• A written statement of how each crew is engaged and paid
• Your plan for introducing the buyer to builders, and for your own role afterward