How to Sell a Business in Quebec: A Step-by-Step Guide for Owners

The process of selling a business is one of the most significant and complex undertakings an entrepreneur can face. It’s a journey filled with important decisions, detailed preparation, and high-stakes negotiations. Whether you’re planning for retirement, seeking a new challenge, or taking advantage of market conditions, a successful sale requires a clear understanding of the steps involved.

This guide provides a step-by-step overview of the process of selling a business, from initial preparations to the final closing, to help you and your team of advisors navigate your transaction with confidence. Understanding this process puts you in a stronger position to plan a smooth, profitable exit and engage the right experts at the right time.

As a corporate law firm, Paquette Attorneys has guided many entrepreneurs through 400+ M&A transactions across Greater Montreal and the province of Quebec; the notes below reflect practical issues we see in Quebec deals.

Laying the Groundwork for the Sale of Your Business

Before putting your business on the market, you need to prepare it for sale. This stage focuses on strengthening the foundation and resolving any issues that might affect value or buyer confidence. Good preparation not only makes your business more attractive but also helps you secure a higher price with fewer surprises once professionals begin their detailed reviews.

Quebec-Specific Prep Checklist

Work with your lawyers and tax advisors to:

• Confirm deal structure preference (asset vs. share sale) and implications under Quebec civil law, including how each structure allocates risk and tax consequences between buyer and seller.
• Map tax considerations (capital gains treatment, exoneration eligibility, GST/QST impact, potential elections) with your accountant or fiscal specialist.
• Ensure core contracts (employees, clients, suppliers, leases) protect your intellectual property and, in certain cases, are available in French and align with Charter of the French Language requirements.
• Identify privacy & data readiness (Quebec Law 25 obligations; data mapping for due diligence) to confirm that your current practices meet legal standards.
• Prepare a high-level transition plan (owner role, key personnel retention, and earn-out readiness) to ensure operational realities, HR considerations, and deal mechanics remain aligned.

This phase typically involves a coordinated review of financial, operational, and legal matters to identify issues early and address them before they affect negotiations or reduce buyer confidence.

Step 1: Getting a Professional Valuation

One of the first and most important tasks in preparing to sell your business is obtaining a professional valuation. This process gives you a clear and realistic understanding of what your company is truly worth in the current market. A well-supported valuation, prepared by a qualified expert, sets the foundation for your asking price and provides credibility when negotiating with potential buyers.

A valuation is an in-depth financial analysis that explains how your business performs, where value is created, and how future earnings potential is assessed. In Quebec transactions, valuation adjustments often reflect owner compensation normalization and one-time expenses, and any cross-border revenue that specialized valuators and accountants are trained to analyze. A professional valuator looks beyond revenue and profit margins to assess the strength of your operations, assets, market position, and long-term earning potential. They consider both tangible and intangible factors that contribute to overall value, such as customer loyalty, intellectual property, and brand reputation.

A professional valuator will typically examine:

• Financial performance – Historical revenue, profit margins, cash flow, and growth trends.
• Assets and liabilities – Physical assets like property and equipment, and any debts or obligations.
• Industry benchmarks – How your business compares to similar companies in your sector.
• Market conditions – Broader economic factors and industry outlook.
• Goodwill and intangibles – Brand strength, reputation, and customer relationships that add hidden value.

Seller Tip: Ask your tax specialist and accountant for a valuation memo that includes asset vs. share sale sensitivity and a working capital peg baseline. Buyers frequently negotiate around working capital and normalized EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and these figures are best modelled by professionals.

They may apply multiple valuation methods to ensure an accurate result, such as:

• Asset-based approach: Focuses on the net value of your business’s assets minus liabilities.
• Market-based approach: Compares your company’s sales to those of similar businesses.
• Income-based approach: Estimates value based on past and future earnings and cash flow potential.

Many professionals use a combination of these methods to ensure the valuation reflects both the company’s current position and future prospects rather than a simple rule-of-thumb estimate.

Before the valuation begins, ask your accountant to recast or normalize your financial statements by adjusting one-time or discretionary expenses. This gives valuators a clearer picture of the company’s true earning power.

A professional valuation does more than help you set an appropriate price; it strengthens your negotiating position. Buyers are more confident when your asking price is backed by independent, data-driven analysis rather than emotion. Although it may feel like an extra cost, a proper valuation often pays for itself by giving you leverage in negotiations, building buyer trust, and helping your advisory team spot ways to enhance value, whether by improving profitability, reducing expenses, or resolving outstanding liabilities.

Step 2: Building Your Advisory Team

Selling a business requires the right team of experts. Your advisory group should include an M&A lawyer, an accountant, and a business broker or M&A advisor, with other specialists added as needed.

• Quebec Mergers & Acquisitions lawyer – bilingual, familiar with your field of business activities, employment norms, extent of the representations and warranties in Quebec civil law, and responsible for drafting and negotiating your transaction documents.
• Tax specialist (CPA/tax attorney) – to model capital gains, income tax exoneration, GST/QST, rollover/election options, and other tax impacts, rather than leaving you to guess at tax outcomes.
• Broker/M&A advisor – with buyer networks (strategic + private equity) and experience running confidential processes and structured negotiations.

Your lawyer will oversee the legal side of the transaction — preparing agreements, reviewing terms, and ensuring compliance with all laws. Your tax professional will guide your lawyer in order for him to structure the transaction such that it is efficient and minimizes income tax. Your accountant will handle the financial aspects, including preparing due diligence documentation. A broker or M&A advisor will help market the business, connect with qualified buyers, and manage offers and bidding dynamics.

When choosing your advisors, look for professionals with experience in your industry and a strong record of closing transactions. They should also align well with your goals and communication style. The right team can make a challenging process much easier and help you avoid costly missteps.

Our firm operates from the West Island and services Quebec’s entrepreneurs, bringing deep M&A expertise with timely support and close coordination with your other advisors.

Step 3: Marketing the Business to Buyers

Once you’ve received a valuation and assembled your advisory team, the next step is to market your business to buyers. This involves preparing materials that clearly communicate your company’s strengths and potential, under the direction of professionals who understand buyer expectations.

Your broker or M&A advisor will create a marketing package that typically includes:

• A teaser — a one-page summary introducing the business without revealing its identity.
• A Confidential Information Memorandum (CIM) — a detailed document outlining the company’s operations, financials, and growth opportunities, shared only with qualified buyers under a non-disclosure agreement.

Your legal team should prepare or review NDAs that reference Quebec governing law and address both French and English disclosures. Ask your advisors to verify that all statements in teasers and CIMs are supported by data. This ensures your marketing materials are accurate, defensible, and aligned with what buyers will confirm during due diligence.

The goal is to generate competition among buyers to increase your sale price and strengthen your negotiating position. Throughout this stage, maintaining confidentiality is critical, since rumours of a potential sale can unsettle staff, clients, or suppliers. Your M&A advisors will therefore manage communications carefully and limit detailed disclosures to vetted, serious prospects.

Step 4: Negotiating the Deal

Once you’ve attracted interest, the negotiation phase begins. This is where your financial and corporate legal advisors play a vital role in protecting your interests and securing favourable terms on your behalf.

Negotiations typically start with a Letter of Intent (LOI) — a binding or non-binding document that outlines the buyer’s initial offer, proposed purchase price, payment method, and general terms. The LOI serves as a framework for drafting the formal purchase agreement. Beyond price, your legal and tax team should help you clarify structure (asset/share), working capital target, earn-out metrics, vendor take-back (VTB) terms, representations & warranties, limits as to the amount of a purchaser claim and non-compete scope (domain/duration/territory), enforceable under Quebec law.

In reviewing the LOI, work closely with your advisors and focus on more than just the price. The form of payment, timing of payments (balance of sale with or without guarantees), and any conditions tied to closing are equally important. This stage may involve several rounds of discussion before both parties agree on terms. In some transactions, sellers benefit from negotiating a short “reverse diligence” period to confirm buyer financing and a carefully drafted no-shop clause that allows limited exceptions if circumstances materially change. Your legal team can advise when these protections are appropriate.

Strong negotiation can make a significant difference to your outcome. With the right M&A expert team by your side, you’ll be better positioned to achieve terms that reflect your company’s real value while staying within legal and tax best practices.

Step 5: Due Diligence

After signing the LOI, the buyer begins due diligence, which is a detailed review of your business to confirm all provided information and uncover any potential risks.

This process often includes examining financial statements, tax records, contracts, customer data, and legal documentation. Buyers may also review leases, supplier relationships, and employment agreements, often assisted by their own legal, financial, and technical experts.

To make this process efficient, your team of experts will typically prepare and manage secure virtual rooms where buyers and their advisors can review documents in an organized and controlled environment.  Well-prepared virtual rooms, structured by your legal and financial professionals, demonstrate transparency and help maintain buyer confidence.

Common items requested during due diligence include:

• Financial statements for the past three to five years
• Corporate and tax documents
• Customer and supplier contracts
• Employment details and policies
• Information on outstanding debts or pending legal matters

Quebec checklist:

• Proof of GST/QST registrations and filings
• Bilingual employment agreements and policy acknowledgements
• Language law compliance evidence (customer-facing materials, software/UI, signage)
• Privacy program artifacts (policies, PIA/assessments, breach logs) per Law 25

Responding promptly to document requests and buyer questions helps maintain momentum and reduces the risk of delays, renegotiation, or uncertainty.

Step 6: Closing the Transaction

Closing is the final stage in selling your business. At this point, the purchase agreement is finalized, and ownership is transferred to the buyer.

On the closing date, funds are transferred to you, and the buyer gains control of the business. There may also be a transition period during which you assist the buyer with operations or introductions. The length and details of this period are typically agreed upon during negotiations and documented by your legal team.

Your lawyer will ensure all legal documentation is accurate and complete. The closing package usually includes the definitive purchase agreement, bill of sale, and other necessary legal documents. Your tax and legal advisors should coordinate CRA/Revenu Quebec tax clearances where appropriate, confirm assignments/consents (leases, key suppliers), and consider GST/QST elections for asset deals when applicable. With their support, you can put in place a practical transition/consulting agreement to secure knowledge transfer without taking on unnecessary legal risk.

A carefully managed closing ensures a smooth transfer and that all parties understand their obligations. With proper preparation and professional guidance, this final step marks the successful conclusion of the business sale process.

Timeline & Milestones

• Prep & valuation: 4–8 weeks
• Market outreach & IOIs: 3–6 weeks
• LOI negotiation: 1–2 weeks
• Diligence & financing: 8–12 weeks
• Definitive docs & close: 3–6 weeks

Typical total: 4–8 months. More complex transactions may extend timelines beyond these ranges, particularly when regulatory approvals, cross-border elements, or complex financing conditions are involved.

What to Decide Early (Asset vs. Share Sale)

• Asset sale: The buyer selects which assets to purchase, which can result in different tax treatment and may require more consents or assignments. Sellers may be able to leave certain liabilities behind, depending on the deal structure and negotiation.
• Share sale: Ownership of the company transfers in full, often enabling simpler operational continuity. However, warranties may be more extensive, and sellers should confirm potential eligibility for the exoneration on capital gain and possibly, removal of excess assets as part of an efficient tax planning.

Action: Decide with your lawyer and tax advisor before marketing, as your teaser/CIM should reflect it. They can ensure that the structure you present aligns with your objectives and risk tolerance.

Selling a business is a milestone event that requires thoughtful planning and the right expertise. By following these steps and relying on a strong advisory team, you can handle the sale process effectively and reach your goals with confidence.

Whether you’re just beginning to think about selling or are ready to move forward, understanding each stage of the process is crucial. For legal guidance on buying or selling a business,  contact us at Paquette Attorneys. Our experienced team can help protect your interests and guide you through every phase of the purchase and sale of a business.