The ownership transfer has three main goals. The first one is to find the future owners of the business. The second one is for the interested parties (the incumbent and the successor/buyer) to reach an agreement on the conditions of the transfer. Finally, the ownership transfer aim to successfully transmit the business assets to the successor/buyer.

As will be discussed in the section Transfer Process, the ownership of the business can be transferred from the incumbent to the successor/buyer in one or more transactions scheduled at regular intervals during a more or less lengthy period. To have a good understanding of the key issues in a ownership transfer, you need to consider closely each one of the factors that influence this type of transfer. These factors vary depending on whether you are the incumbent or the successor/buyer.

Factors that influence a transfer of assets

If you are the current owner (the incumbent):

What do you expect to achieve by the ownership transfer?

  • Make as high a profit as possible;
  • Ensure that the business remains in the family;
  • Maintain control of the business by only transferring a part of the assets;
  • Ensure the growth of the business;
  • Preserve local jobs.

To find out more, do the Quiz: Discover Your Incumbent Profile.

Who do you wish to transfer the ownership of your business to?

  • The process will be different depending on whether you are selling your business to a third party, you are selling it to your employees, or you are transferring it to family members.

What is the financial value of your business?

  • It has an impact on your ability to attract a pool of potential buyers.
  •  Carrying out due diligence will help you determine the exact market value of your business and distinguish it from the sentimental value that the business has for you.
    • Ideally, you should undertake this exercise with a Certified public accountant. The information that you obtain from this due dilligence will allow you to assess the strategic, the financial, and the legal strengths and weaknesses of your business so that you have a better understanding of its real market value.

What is the pace at which you wish to transfer the assets of your business?

  • Note that if you transfer stocks and shares to your family or to your employees, the pace of the process may be much slower than if you sell your business to a third party.

If you are the successor/buyer:

What do you expect to achieve by acquiring a business?

  • Be your own boss;
  • Make a lot of money;
  • Develop a sector of activity that you are passionate about;
  • Carry on the family tradition;
  • Take on the challenge of making a business grow;
  • Preserve local jobs.

To find out more, do the Quiz: Discover Your Successor Profile.

What resources do you have?

  • Financial resources;
  • Competencies, skills, experiences related to a specific industry;
  • Relational resources (a network of contacts);
  • Entrepreneurial skills.
    • Have you ever started a business?
    • Have you ever acquired an existing business?
  • If so, this past experience will give you a better idea of the type of business for which you have the ability to take over the reins.

Who are you taking over from?

  • The ownership transfer will be different depending on whether you are taking over the family business, you are taking over your employer’s business, or you are buying a business from a stranger.
  • This will also influence the pace of the transfer process.

How do you intend to embark on the succession adventure?

  • Alone or with partners (friends, colleagues, your spouse, children, brothers, sisters, etc.)?
  • Will you only be the owner or shareholder, or do you intend to take over the management of the business?