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.
Frequently Asked Questions
1. What is the most critical step in buying a business?
Due Diligence. You must legally investigate the business’s finances, contracts, employee liabilities, and any hidden lawsuits or debts before signing.
2. What is a Letter of Intent (LOI)?
It is a document that outlines the basic deal terms (like price and assets) before the final contract is written. It helps both parties agree on the big picture first.
3. Do I need to register anything after the purchase?
Yes. You must transfer or update business licenses, GST numbers, permits, and lease agreements to ensure the business is legally yours and compliant.
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Do not hesitate to contact us for a consultation to discuss your matter. Call us at 403-300-5297 or email us at info@lawsnbeyond.com and we will provide you with the support you need.
