Selling a garage door and locksmith company in Canada

An owner who has decided to sell faces a sequence, not a single event. The order matters here because the phone number, listings and customer calls may be tangled up with the owner personally. A buyer who finds that during diligence may reopen the price, so consider fixing it before the business goes to market. This guide follows the order an owner would work through: get the business separable, settle the structure, deal with the regulators, protect confidentiality, and prepare what a buyer may ask to see.

Make the business separable first

Start by listing everything that makes the phone ring: the main number, online listings, review profiles, the website and domain, and the advertising accounts. Move any that are held personally into the company, and make sure someone other than you holds admin access. Then look at the van fleet and parts stock, and whether they are owned or leased. None of this needs a buyer, and all of it can be done before a letter of intent exists.

Assets or shares, and the workers’ compensation clearance

Structure affects the paperwork. The Workplace Safety and Insurance Board in Ontario says that if you are selling or purchasing 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, that the request must be made before the date of sale, and that a certificate is valid for 30 days from the date of issue printed on it. It adds that a share sale creates no new legal entity, so none is required. Other provinces run their own boards; WorkSafeBC, for example, tells buyers of assets to contact it first because, if the seller owes unpaid premiums, the firm’s assets may be subject to a lien in its favour, and it adds that a clearance letter will protect the buyer against such liens. For a share sale, the WSIB says you still need to submit the Share Purchase Agreement. Ask your lawyer which board applies and what it needs from you.

Licences and staff

Ask your provincial regulator what licence, if any, applies to your locksmith work and to the people doing it, and whether it belongs to the individual or the business. In Ontario, the Ministry of the Solicitor General says a security guard or private investigator needs a licence and a business that sells their services needs an agency licence; the page does not name locksmiths, so ask. If a technician’s licence is personal, tell the buyer early, because the buyer needs to know which technicians stay and which licences cannot move with the company.

Keeping the sale confidential

BDC warns that, depending on a listing site’s confidentiality procedures, word could get out to employees, customers or suppliers that you are selling. BDC also notes that a change in business ownership can be disruptive for employees, customers and suppliers, and says to work out a transition plan with the buyer that includes a plan to retain them and how you will communicate with them about the change. Decide who among your technicians and dispatchers needs to know, and when. Use a non-disclosure agreement before sharing anything identifying. Customer and job records contain personal information, and section 7.2 of the federal privacy law, PIPEDA, lets organizations that are parties to a prospective business transaction use and disclose personal information without the knowledge or consent of the individual if the conditions in that section are met. That is in addition to the circumstances in subsections 7(2) and (3), and subsection 7.2(4) excludes a transaction whose primary purpose or result is the purchase, sale or other acquisition or disposition, or lease, of personal information. Read those conditions with your lawyer before opening files to a buyer.

What a buyer may ask to see

BDC says an accountant can help you prepare year-end and interim financial statements, projections and the other documents buyers ask to see in due diligence, and that buyers will ask to look at historic and interim financial statements, projections, tax returns and other records. Add the items specific to this trade: call volume by source, dispatch procedures, a parts count, staff licences and background-check records where required, and any franchise agreement. BDC also suggests documenting standard operating procedures so operations transfer more easily to a new owner.

• Move the phone number, listings, domain and ad accounts into the company with shared admin access
• Decide asset or share sale with your lawyer and accountant, then request any workers’ compensation clearance before the sale date
• Ask the provincial regulator how locksmith work and staff are licensed, and whether licences move with the company
• Sign a non-disclosure agreement before sharing customer records or identifying details
• If you operate under a franchise banner, read the transfer terms early and approach the franchisor before listing