Latest news

Request a Call Back and our team will get in touch with you ASAP.

Area of Interest

Our Experts’ Latest Insights

Succession Planning for your Small Business

Have you created a succession plan for your small business? If you haven’t, you would not be alone. Quebec’s population is aging faster than the rest of the country and Boomers are rapidly reaching retirement age. In fact, one-quarter of Quebecers will turn 65 by 2030 and many do not have a succession plan in place. 

Small business owners are used to being “in charge”. Planning for the day when they need to hand over the reins of their business has proven to be a challenge for many. If you want to make sure your family is taken care of, and your business is poised to carry on without you, there are several things you need to consider at least three to five years before you plan to retire. 

Do you have a family member in mind to take over for you? Are you selling the business to an employee, a potential partner or externally? 

If you are transferring your business to a family member, limiting capital gains taxes may involve using an estate freeze. In an estate freeze, the existing shareholder “freezes” the value of their ownership in the business and any future growth is attributed to the new shareholder(s). This tax strategy is often used proactively by business-owners, while they are active in the company. 

An estate freeze can be complex, and several income tax rules need to be considered. For instance, the effect the structure has on tax on split income and the recent changes enacted to facilitate the transfer of a business to children and grandchildren are matters to think about. 


 An estate freeze may allow you to: 

• Retain control of your business after the transfer 

• Transfer your business to family members without incurring any immediate income tax 

• Have a steady stream of retirement income 


If you are planning to sell your business to an employee, a potential partner or externally, there are many items to consider. First, you must assess the future viability of the business. Next, your business must be valued and an assessment of its “readiness for sale” must be taken into consideration. This may include purification strategies to be eligible for the capital gain exemption. In addition, a realistic timeline for locating and grooming a successor and the ultimate sale of the business must be put into place. Finally, make sure to protect your interests when selling your business by hiring a professional sales agent. 

For more advice on retirement planning, estate freezes, selling of your business and any other complex tax matter, contact your SLF adviser.