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Corporate finance

Transferring your business: options you don't think about

November 17, 2023

In Quebec, many entrepreneurs are approaching retirement age. After years of working and counting their hours, in addition to personally accepting some of the financial risks and significant responsibilities, entrepreneurs face a new life stage that raises questions about the options available to transfer their business.

According to data from the Quebec Entrepreneurial Index, of the 1 (e) or more businesses, six-in-ten (58.9 per cent) of the owners intend to sell or sell their business over a 10-year time horizon. Yet, many are hesitant about this transition.

Preparing for the transfer of your business is definitely an emotionally difficult and logistically complex process for an entrepreneur. After spending so much time, effort and energy building his business, the thought of putting it in a new direction can be daunting.

For this reason, it is important to prepare this step properly.

Planning for your retirement as an entrepreneur 

Identifying succession, preparation, knowledge transfer, due diligence, financial plan and transition period: a business transfer requires many steps beyond the transaction alone. The complexity of the transfer process is often underestimated. Because it can span five to seven years — and even more so if the share structure is complicated — careful planning is key.

The different transfer options

You know the conventional transfer model, which plans to sell its shares entirely to an acquirer, but do you know the other options available for your business?

Partial transfer 

Due to its popularity, the partial sale model allows the entrepreneur to give up some aspect of the business while still being involved in the business. This option allows for a one-step transfer to be made over time. Also, this model may be considered in an effort to add a new shareholder who will breathe a new life into the business. This reduces the pressure to find a successor while retaining a continuing involvement in the business.

For example, a Desjardins manufacturing client was looking to sell his company to his management team and he was happy to do so because of their efforts to help build the company. The issue is too much value to the financial capacity of key employees and would put the financial strength of the company at risk.  With the support of Desjardins, a partial transfer of 49% was agreed on in the first phase. This strategy allowed entrepreneurs to accomplish several goals, including securing some of their wealth, leaving more space for the team and retiring from management and shareholder responsibilities more gradually. The best of both worlds.


This option allows you to share ownership with an investor providing both capital and often expertise. And it provides an opportunity to shift the equity that has accumulated in the business over the years to the shareholders who created it. It's a mid-toyenne's solution that takes a bit of a burden on the entrepreneur to plan for business development. However, he must agree to share ownership. The investor can be passive and not inter-wined with operations or can be an active and strategic investor. In today's economic climate — where companies are looking for more agile governance — this formula is more common. 

Creating a Co-operative of Workers 

The majority of employees will become part of the new entity together. This type of executive transition and power transfer builds trust among employees, customers and financial partners. You need to know how to consolidate good leadership and a sustainable financial and tax strategy. This model has gained traction in recent years. In some industries or for a company with a strong employee culture, it can make sense that employees are engaged to keep the company going. This is not yet known and needs more attention. 

Know where you are and how to make the most decisions

Your business is an important asset in your wealth and should be transferred as part of your retirement plan. Each model has specific planning, tax and financing issues. Talk to your account manager about your plans, and they can direct you to lawyers, tax professionals, accountants and other experts who can meet your unique needs. Thus, you will benefit from personalized support, based on numerous successful transfers.