Purchasing an existing business is one of the fastest ways to enter entrepreneurship—but it’s also a legal process that requires precision, due diligence, and the right professional guidance. At Laws & Beyond, we help Calgary-based entrepreneurs navigate every legal step of a business acquisition with clarity and confidence.
Step 1: Define Your Business Acquisition Goals
Before starting your search, clarify your vision:
- What type of business suits your skills or passions?
- What is your financial budget and preferred industry?
- Are you looking for a franchise, retail store, or professional service firm?
Why this matters legally: Your goals determine the type of entity structure, licensing requirements, and risk level involved.
Step 2: Find the Right Business Opportunity
Sources for businesses for sale include:
- online platforms
- Business brokers and advisors
- Industry associations and personal networks
- Franchise resales
Legal tip: Ensure the seller has the legal right to sell. A preliminary background check is a smart first step.
Step 3: Initial Evaluation of the Business
Once you identify a potential business:
- Review financial statements (P&L, tax returns)
- Examine the brand, location, and client base
- Understand the seller’s reason for exiting
Legal warning: If any documents seem incomplete or inconsistent, proceed with caution.
Step 4: Legal Due Diligence
This is the most critical phase in protecting your investment. Your lawyer should investigate:
- Business incorporation status
- Contracts, leases, licenses, and supplier agreements
- Staff employment terms and liabilities
- Legal disputes, liens, or lawsuits
- Intellectual property (logos, trademarks, trade secrets)
Pro tip: Hire both a lawyer and accountant to perform a full due diligence audit.
Step 5: Secure Business Financing
You may fund the acquisition through:
- Personal capital
- Business loans (banks or government-backed)
- Seller financing (installment payments)
- Private investors
Legal angle: Ensure financing agreements are formally documented and reviewed by a legal professional.
Step 6: Negotiate the Deal Terms
Negotiation should cover:
- Purchase price and asset breakdown
- Transition assistance from the seller
- Training periods
- Included inventory, real estate, and goodwill
Document: Start with a Letter of Intent (LOI), a non-binding document summarizing the basic terms before finalizing the agreement.
Step 7: Draft the Business Purchase Agreement
This legally binding document should cover:
- Assets being transferred (equipment, inventory, IP)
- Payment terms and timelines
- Non-compete clauses
- Seller’s responsibilities during handover
- Indemnity clauses for legal protection
This is where our law firm plays a crucial role—ensuring all aspects are enforceable and in your best interest.
Step 8: Transfer Ownership & Compliance
Post-sale legal actions include:
- Transferring licenses, GST/HST numbers, permits
- Assigning leases or renegotiating terms with landlords
- Updating registrations with CRA, Alberta registries, and city licenses
- Opening new business bank accounts and insurance policies
Avoid delays by ensuring all paperwork is complete and compliant with local and federal laws.
Step 9: Post-Sale Legal Support
Once the business is legally yours:
- Communicate transparently with employees and customers
- Monitor compliance (employment law, health & safety, tax obligations)
- Consult a business lawyer regularly in your first year
Bonus: We also offer business advisory and employment law services to help your business grow sustainably.
Final Thoughts
Buying an existing business in Calgary can be a rewarding path to ownership, but legal missteps can turn an opportunity into a liability. Whether you’re buying a retail shop, franchise, or service business, our firm will guide you through every legal step—from due diligence to deal closing.
