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Buying an established business is one of the fastest ways to build a life and a livelihood in Canada. You inherit customers, staff, suppliers and a track record. That is very different from starting from a blank page. But a purchase also has more moving parts than most people expect. This guide walks through the process the way experienced buyers approach it, from defining what you want to closing the deal.

1. Define your buy box

Before you look at a single listing, write down what you are actually looking for:

• Sector: industries where your experience transfers, such as hospitality, child care, health and wellness, or trades.
• Location: a province and community where you want to live, keeping in mind that some immigration streams favour regional or rural areas.
• Size: revenue range, number of employees and how much of the day-to-day work you want to do yourself.
• Budget: your cash available, how much you can borrow, and how much working capital you will need after closing.

A clear "buy box" saves months of looking at businesses that were never a fit.

2. Assemble your team early

Most first-time buyers wait too long to bring in advisors. A typical Canadian deal involves:

• a business lawyer to structure the purchase and draft the agreement,
• a CPA to review the financial statements and tax position,
• a lender or financing advisor, and
• if you are moving to Canada, a licensed immigration professional (a regulated Canadian immigration consultant or lawyer) to confirm whether the business fits a pathway before you commit.

3. Asset purchase or share purchase?

There are two basic ways to buy a Canadian business:

• Asset purchase. You buy specific assets: equipment, inventory, goodwill, contracts. You generally take on only the liabilities you agree to, and the purchase price can be allocated across assets so you can claim capital cost allowance (tax depreciation) on them.
• Share purchase. You buy the shares of the company that owns the business. Contracts, licences and permits often stay in place, but you inherit the company's history, including any hidden liabilities.

Sellers often prefer a share sale because they may be able to use the lifetime capital gains exemption on qualified small business corporation shares. That exemption is $1.25 million for sales on or after June 25, 2024, and is indexed to inflation. Buyers often prefer assets. The final structure is usually a negotiation, and it affects price.

4. Sign an NDA, then a letter of intent

Serious sellers share detailed information only after you sign a non-disclosure agreement. Once you like what you see, you submit a letter of intent (LOI) setting out the price, structure, financing conditions, a due diligence period and an exclusivity window. An LOI is usually non-binding on price but binding on confidentiality and exclusivity.

5. Do your due diligence

This is where deals are won or lost. At a minimum, review three to five years of financial statements and tax returns, customer concentration, leases, staff contracts, licences and permits, and any pending claims. We cover this in depth in our due diligence checklist.

6. Check the Investment Canada Act

If you are not a Canadian citizen or permanent resident and you are acquiring control of a Canadian business, the Investment Canada Act generally requires you to file a notification with the federal government. For a small business this is usually a simple filing, which can be made within 30 days after closing. Full "net benefit" reviews apply only to much larger deals. In 2026 the threshold for most private investors from WTO countries is an enterprise value above $1.452 billion. Your lawyer will confirm what applies to you.

7. Arrange financing

Most small business purchases combine the buyer's own equity, a bank or BDC loan, and often a vendor take-back, where the seller finances part of the price. See our guide to financing a business purchase in Canada.

8. Close and transition

The purchase agreement sets out the closing date, adjustments (inventory, deposits, prepaid expenses) and the seller's transition support, which is often 30 to 90 days of training and introductions. Plan your first 100 days carefully: keep key staff, meet top customers in person, and avoid big changes until you understand why things are done the way they are.

A note for newcomers

If buying the business is part of your immigration plan, the order of steps matters. Many entrepreneur pathways have specific rules about ownership percentage, investment amount, location and timing. Some require you to register before you buy. Confirm the pathway with a licensed professional before you sign anything binding.

This article is general information, not legal, tax or immigration advice. Program rules change; eligibility is decided by the program and confirmed by a licensed professional.

Sources: Investment Canada Act, Innovation, Science and Economic Development Canada; 2026 Investment Canada Act thresholds, McMillan LLP; The tax side of buying or selling a business, Small Business BC.