Sell your software or IT services company

The 35 percent refundable rate is available mainly to Canadian controlled private corporations, and a corporation controlled by non-residents is excluded. Once a foreign buyer takes control, the company generally earns the 15 percent basic rate, which is non-refundable. Selling an IT or software company

A non-Canadian acquiring control must notify ISED before closing or within 30 days after it, unless the investment is reviewable. Separately, any investment, including a minority one, may be subject to national security review, and ISED lists sensitive technology and sensitive personal data among the relevant factors.

The author is the first owner of copyright, and an assignment is valid only in writing signed by the owner. Moral rights cannot be assigned but may be waived, so a buyer looks for both a signed assignment and a waiver from each contractor who wrote code.

Under PIPEDA, personal information may be disclosed to a prospective buyer where it is necessary for the transaction and protected by an agreement that limits its use. It must be returned or destroyed if the transaction does not proceed, and individuals are notified within a reasonable time after closing.

Software companies adding products or customers, private equity funds building technology platforms, managed service consolidators acquiring regional providers, and US acquirers entering the Canadian market. Recurring revenue and net retention are the measures each of them prices first.

Under the Copyright Act, work made by an employee in the course of employment belongs to the employer unless the parties agreed otherwise. Code written by contractors and founders before incorporation is different and passes only by a signed written assignment.

In an asset sale, the buyer and seller can jointly elect on Form GST44 so that no GST/HST applies, provided the buyer acquires all or substantially all of the property needed to carry on the business. Services the seller continues to provide, and licences, remain taxable.