Preparing your business for sale: legal steps to take early

You can begin preparing the legal side of your business before you decide to sell. That work starts with finding out whether the company's records, ownership arrangements and key contracts reflect how the business operates today.

In our October 22 webcast, “Before You Sell Your Business: The Legal Steps That Protect Value,” Wes Forgione of Forgione Deal & Corporate Counsel explained what he examines when acting for buyers and sellers. His examples showed how unresolved issues can become urgent once an owner needs to leave or a buyer sets a timetable.

These are five areas from the discussion to review with your advisers.

Get the corporate records in order

Wes described the corporate minute book as his starting point when reviewing a business for a buyer. It records the company's corporate decisions and ownership history. Missing or inconsistent records can leave questions about who owns shares and whether changes were properly documented.

In one example, a founder who was not yet ready to sell had been managing the records himself. Wes described share certificates that did not match the share register, missing resolutions and officers listed who no longer worked at the company. The team addressed those discrepancies before a sale process began.

Ask your lawyer to check the minute book against the company's current ownership and management. Gather the share register, certificates and relevant resolutions, and identify anything you cannot locate. Let counsel determine what needs correction and how to document it.

Identify rights that could complicate a sale

The ownership picture can include commitments an owner has not thought about for years. Wes described a seller whose employee agreements included rights to acquire shares. Those rights had to be negotiated during the transaction, with an unexpected payment for the seller.

He also discussed shareholder agreements and rights of first refusal as matters he examines when assessing who could affect a proposed sale.

Bring your lawyer the shareholder agreements, amendments and any employee share or option arrangements. Ask whose rights need to be considered, what approvals or other steps the contemplated transaction would require, and which issues should be addressed before approaching buyers. The answers depend on the actual documents and proposed transaction.

Review agreements the business depends on

Two software examples showed the difference timing can make. In the first, the business depended on a custom system maintained by an outside developer. The relationship had deteriorated, invoices were disputed and, according to Wes's account, the developer controlled the code. The agreement lacked the transition arrangements needed for the sale.

The parties had to negotiate a way to reconcile the outstanding work and invoices and arrange a handoff to the buyer's developer. The owner was trying to leave while resolving a dispute with someone the business still depended on.

In a separate case, another founder had similar gaps in an outside-developer agreement. The relationship was good, and the parties addressed transition and dispute provisions early. Wes described the preparation work, without reporting a subsequent sale or price.

Review your important customer and supplier contracts, software arrangements, leases and licences with counsel. Ask what happens if support stops, a relationship ends or ownership changes. Explain how each arrangement works in practice, including any access or responsibilities you handle personally.

Review employment terms and protections for business information

Wes highlighted written employment agreements, confidentiality and non-solicitation provisions as areas buyers examine. In the early-preparation example, the founder had employees without written employment contracts.

Ask counsel with employment-law expertise to assess your current agreements, outstanding commitments and any gaps. Include how confidential information and customer relationships are handled. What is appropriate or enforceable depends on the circumstances; changes to existing arrangements need advice specific to the business.

Get advice before setting terms with a buyer

Near the end of the webcast, Wes addressed an unexpected buyer approach. His recommendation was to involve an M&A lawyer, accountant and transaction adviser before negotiating terms. He warned that expectations can become difficult to change even before they are written into a letter of intent, or LOI.

If an approach arrives, bring your advisers into the discussion before agreeing to a price structure or timetable. Explain what you want from the sale and when you hope to step back. If some payment would depend on future business performance, ask how the conditions, access to information and payment dates would be defined.

Tools discussed in the webcast

Wes demonstrated his Business Exit Audit and Owner Dependence Audit during the webcast. Owners can use these self-assessments to identify questions to discuss with their advisers. For more detail on the transaction process, his Selling a Business in Ontario guide covers the stages from preparation through closing.

Questions for your legal review

Use these questions to scope an initial discussion. They are editorial prompts drawn from the webcast themes, rather than a complete legal checklist.

Wes's action-list discussion offered a way to begin without taking on every issue at once: identify the gaps and work through them over time. Ask your advisers to help prioritize the work, assign responsibility and set a date to review progress.

Keep your personal plans in that discussion. If legal work changes the expected timing or terms of a sale, your wealth adviser can help assess what that means for your income and retirement plans.

Based on the October 22, 2026 webcast, “Before You Sell Your Business: The Legal Steps That Protect Value,” with Wes Forgione. Client examples are paraphrased from his account using the automatic transcript and have not been independently verified. The questions and suggested actions are editorial applications of the discussion. This article provides general education; legal, employment and tax matters require advice specific to the business and proposed transaction.

Watch the full webcast.