In BC, a broker who sells your lease or building needs a licence
The people a British Columbia owner hires to sell a business, what each one does and when, and the public register that shows whether each is licensed.
Hire a CPA first, a BC lawyer before you sign any letter of intent, and a broker or M&A advisor to find buyers. Where the sale includes a building or a lease, the person paid to sell it must hold a real estate licence from BCFSA. Each of these professionals can be checked on a public register.
The people a BC owner ends up hiring
An owner who searches for a business broker in BC is usually asking a wider question: who should I hire to sell my business, and how do I know they are allowed to do it? The general question of which route suits you is answered in broker, advisor or yourself. The BC tax and employment rules are in selling a business in British Columbia.
This page covers the people. A typical BC sale involves someone to find the buyer and two professionals on your side, a lawyer and an accountant. Some sales add an independent valuator. Each person answers to a different body, and each body keeps a public register you can search in a few minutes. The rules apply the same way to an M&A advisor in Vancouver as to a broker in a smaller town.
| Who | Their part in the sale | Who licenses or certifies them in BC | How to check them |
|---|---|---|---|
| Business broker or M&A advisor | Finds buyers and runs the negotiation up to a signed agreement | BCFSA, under the Real Estate Services Act, whenever the services touch a building or a lease | BCFSA’s Find a Professional register |
| Commercial real estate licensee | Sells or leases the building when it is handled apart from the business | BCFSA, under the same Act | BCFSA’s Find a Professional register |
| Lawyer | Gives legal advice and drafts the purchase agreement and closing documents | The Law Society of British Columbia | The Law Society’s Lawyer Directory and its unauthorized practitioners database |
| Accountant (CPA) | Prepares the statements a buyer reads and plans the tax on the sale | CPABC, under the Chartered Professional Accountants Act | CPABC’s Member Directory and Firm Directory |
| Chartered Business Valuator | Writes an independent valuation report that others can rely on | The CBV Institute, which grants the CBV designation | The CBV Institute’s Find a CBV directory |
When a BC broker needs a real estate licence
Section 3 of the Real Estate Services Act requires anyone who provides real estate services to another person for pay to hold a licence, with exemptions that include practising lawyers. The Act defines a trade in real estate broadly. It covers a sale or lease of real estate, and it also covers the assignment of a lease.
The services caught by the Act include finding a buyer and negotiating the price, so a broker paid to do those things for a sale that includes real estate needs the licence. Section 4 adds a practical consequence. A person can sue for a fee for real estate services only if they were licensed or exempt when they provided them.
The BC Financial Services Authority (BCFSA), which licenses real estate professionals, applies this to business sales in its Sale of a Business guideline. An asset sale that includes the sale or lease of real property, or the assignment of a lease, is governed by the Act. A share sale of a company with real estate can count as real estate services as well. An asset sale made up purely of equipment and goodwill falls outside the Act, and BCFSA notes that some licensees act as business brokers on exactly those deals.
Most owner operated businesses sit in premises they own or lease, so the lease alone often brings a sale under the Act. Ask any broker at the first meeting which parts of your sale fall under the Act.
What the BCFSA register tells you about a broker
BCFSA’s Find a Professional register lets you search by name or licence number, among other ways. Each result shows the licence category and level along with any conditions on the licence, and recent discipline appears there too. The register covers the current licence period, and BCFSA describes it as an unofficial search, with an official one available by contacting BCFSA directly.
Two further points from the guideline are useful to a seller. A deposit on a sale governed by the Act goes into the brokerage’s statutory trust account. On a sale outside the Act the deposit goes to a separate trust account or to a third party the contract names, and BCFSA warns licensees that a RESA form on such a deal would suggest protections the parties lack. Some brokers also hold designations from private associations, which are memberships; the BCFSA register is the public record.
Your lawyer, from the letter of intent to closing day
Under section 15 of the Legal Profession Act, the practice of law in BC belongs to practising lawyers, with narrow exceptions. The Act’s definition includes giving legal advice and drafting documents that reorganize a company. In a sale the lawyer reviews the letter of intent and then drafts or negotiates the purchase agreement. The same lawyer usually handles the closing documents and the due diligence replies.
Bring the lawyer in before you sign a letter of intent, since its terms set the shape of everything after it. The Law Society’s Lawyer Directory shows each lawyer’s current practice status and any discipline history. Restrictions on practice and current regulatory proceedings appear there as well. The Law Society also keeps a database of unauthorized practitioners, and for referrals it points the public to its Finding a lawyer page.
Your accountant, two years ahead
CPABC regulates the practice of accounting by its members and registered firms under the Chartered Professional Accountants Act. Its page on whether to use a CPA makes the distinction plain: anyone in BC can call themselves an accountant, and only a CPA is a member of a regulated profession. A CPA who serves the public holds a public practice licence, and assurance work such as an audit belongs to CPAs.
The accountant is the first person to call. They prepare the statements a buyer will read and document the add backs. They also check whether your shares qualify for the lifetime capital gains exemption, which can take two years of purification. CPABC’s member and firm directories list its members by city and the registered firms in good standing. Our guide for accountants sets out their part from their side.
A Chartered Business Valuator for the number others must accept
A Chartered Business Valuator holds a designation granted by the CBV Institute, and the Institute’s page on when to engage a CBV lists selling a business and buying out an owner among the occasions. A CBV report sets out the reasoning behind the number, and that is its use: it gives a value that a lender or the CRA can test.
Many sales to an outside buyer close on a price set by competing offers, so a full report is optional there. It earns its fee where one party must accept a value set by someone else, such as a partner leaving or a sale to your children. The Institute’s Find a CBV directory searches by location and specialty, and what a business valuator does compares the kinds of valuation on offer.
The order to bring each one in
- 01Two years out, the accountant cleans up the statements and checks the capital gains exemption.
- 02Before you approach anyone, get a valuation range, and commission a CBV report where a partner or family member is on the other side.
- 03When you choose the person who will find buyers, check them on the BCFSA register if a building or a lease is part of the sale.
- 04Before you sign a letter of intent, have a BC lawyer read it.
- 05Through due diligence and closing, the lawyer and the accountant work together on the agreement and the tax.
For an owner planning the years before a retirement sale, BC business owners retiring sets out a countdown, and a buyer coming through the BC PNP covers one kind of buyer particular to the province.
The full set of costs is laid out in the cost to sell a business in Canada, and owners in other provinces can read the versions for Ontario and Alberta.
InvestDeal is an M&A advisory firm that represents the seller. Its fee is five percent of the sale price, paid on closing. Whoever you hire, InvestDeal included, ask how the building or the lease will be handled and who holds the licence for that part. To see where your business stands before you call anyone, the free valuation is anonymous and gives an early range in a few minutes.
The provincial tax and regulatory requirements, regions and buyers are set out on selling a business in British Columbia.
Fee structure, buyer outreach and disclosure are compared in InvestDeal compared with a business broker.
Questions owners ask
- Does a business broker in BC need a licence?
- A broker needs a real estate licence from BCFSA when the sale includes real estate, and the Real Estate Services Act counts a lease and the assignment of a lease as part of a trade in real estate. An asset sale made up purely of equipment and goodwill falls outside the Act. BCFSA’s Sale of a Business guideline sets out both cases.
- How do I check a business broker in BC?
- Search the broker on BCFSA’s Find a Professional register. It shows the licence category and level, any conditions on the licence and recent discipline for the current licence period. For an official confirmation, BCFSA answers enquiries directly.
- When should I hire a lawyer to sell my business in BC?
- Before you sign a letter of intent, since its terms shape the purchase agreement that follows. In BC the practice of law belongs to practising lawyers under the Legal Profession Act, and the Law Society’s Lawyer Directory shows each lawyer’s practice status and discipline history.
- Do I need a Chartered Business Valuator to sell my business?
- A CBV report is most useful where one party must accept a value set by someone else, such as a partner buyout or a sale to family. Sales to an outside buyer often settle on a price set by competing offers, and a free valuation range gives you a starting point for those.