The short answer
Before you close a business that makes money, find out what a buyer would pay. BDC says a business expected to be liquidated is valued on its assets, while an established business with reasonable returns is valued on its earnings, because its value is greater than its assets alone.
Thinking of closing? See what your business could sell for first.
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How do I decide?
If it pays you a steady income, find out what a buyer would pay before you close. A business that earns can have a sale value. Closing leaves only what the assets fetch.
BDC says earnings based valuation is commonly used for established businesses that earn reasonable returns and are worth more than their assets alone. Asset based valuation is typically used when a business's value sits in its assets, when it earns poor returns, or when it is expected to be liquidated. Closing a business puts it in that second group.
Closing may still be the right call, for example when a business earns little and its value is its equipment. You are not alone in asking. Innovation, Science and Economic Development Canada reports that more than 17% of small and medium business owners plan to exit their business within the next five years, citing the 2023 Survey on Financing and Growth of Small and Medium Enterprises.
What does closing cost me that selling would not?
Three things: the price of your earnings, your staff's jobs, and GST/HST on what you still hold.
| Topic | If you close | If you sell |
|---|---|---|
| How it is priced | On its assets, when a business is expected to be liquidated | On its earnings, when it is an established business with reasonable returns |
| Your employees | You end their jobs. In BC you give written notice or pay, called compensation for length of service, or both. In Alberta, employer and employee give each other written notice, and the employer can pay termination pay instead. | Their length of service carries over. BC treats their employment as continuous and uninterrupted by the sale. Under Alberta's Employment Standards Code they keep all previous length of service. |
| GST/HST | When you close your GST/HST account, the CRA treats you as having sold the stock and equipment you still hold, and GST/HST can be owed on that. You also file a final return and pay what you owe. | If you sell a whole business, you and the buyer may be able to elect that no GST/HST is payable on the sale. It cannot be made if you sell only one or more assets. |
The amounts depend on your own case. Your lawyer papers the deal and your accountant advises on tax. Both are yours to choose.
Is my business something a buyer would want?
It is if a buyer can keep it running without you. Six questions show how a buyer will read your business, taken from the lists on our valuation page.
- Does the work repeat, through maintenance contracts or repeat customers?
- Do staff and systems run the business without you?
- Are your books clean, with statements and filed taxes that match reality?
- Is your equipment owned, in good repair and documented?
- Do you have many customers, with no single client dominating?
- Can a buyer take over your lease, or do you own the premises?
Each yes pushes a multiple up. A business where everything depends on the owner, one customer makes up most of the revenue, the books are informal, the equipment is aging, the lease runs month by month on an essential location, or revenue is falling with no explanation drags it down. Most of that can be built or fixed before you sell, so the answers you have today are a starting point and not a verdict.
What is it worth before I decide?
A range, built from your owner earnings. BDC says the multiple for a small to medium sized business could range between three and six times EBITDA, and that it varies by industry and market conditions.
That is a general range, not your number. Our guide on how many times profit a small business is worth shows how to work out owner earnings and what moves a multiple. A free sale plan starts from the same place, and it gives you an estimated range and an honest read on whether the business will sell.
Before you close, find out what a buyer would pay and how a sale would work.
Get my free sale planWhat does closing a company involve in Alberta and in BC?
It involves a vote, no debts left over, a government filing, and a final return to the CRA. The steps differ by province.
In Alberta
- Vote to dissolve the corporation. You and the other shareholders or directors can vote if the corporation has stopped doing business and does not have any debts.
- Sell all property and pay all debts. If the corporation still has liabilities, you and the other shareholders must appoint a liquidator to deal with the corporation's assets and settle those debts to the best of their ability.
- File the Articles of Dissolution. Service providers charge a government fee and a service fee for filing liquidation and dissolution information.
In British Columbia
A company may apply to be dissolved when an ordinary resolution authorizes it, it has no assets, and it either has no liabilities or has made adequate provision for the payment of each of its liabilities. A director swears an affidavit saying so, and the company deposits it in its records office. The company files an application for dissolution with the registrar, and it must be in good standing, which means it is up to date with its annual report filings.
With the CRA, in both provinces
If you decide to close your GST/HST account, you must notify the CRA and give the reason, file a final GST/HST return and pay any amounts you owe.
If you are a sole proprietor, there is no company to dissolve. The CRA says the owner of a sole proprietorship does not have separate legal status from the business.
What if I want to stop working soon?
You can sell and still step away, but a buyer pays more for a business that runs without you than for one that stops when you leave. Everything depending on the owner personally is on the list that drags a multiple down.
In our process, a sale that closes ends with the money in your account, the keys handed over on your terms, and a handover plan the buyer signed up to. If the timing is not right yet, we can work with you on a plan to prepare for a future sale.
Questions owners ask
Can I sell a business that does not earn much?
Do I owe my staff anything if I close?
Is GST/HST owed when I close my business?
How do I close my company in Alberta or BC?
What if I run a sole proprietorship?
See what a sale would look like before you decide.
Get my free sale planSources
- Business valuation: What's your company worth?, BDC, updated 4 October 2022, read 21 October 2026.
- Business succession planning, Innovation, Science and Economic Development Canada, page dated 27 July 2026, read 14 October 2026.
- Close your GST/HST account, Canada Revenue Agency, page dated 16 June 2026, read 21 October 2026.
- Selling a business, Canada Revenue Agency, page dated 27 July 2026, read 21 October 2026.
- Quitting, getting fired or laid off, Government of British Columbia, last updated 31 January 2024, read 21 October 2026.
- Employment standards: termination and layoff, Government of Alberta, read 21 October 2026.
- Employment Standards Act, section 97, Sale of business, BC Laws, King's Printer, act current to 13 October 2026, read 21 October 2026.
- Liquidate or dissolve a corporation, cooperative or organization, Government of Alberta, read 21 October 2026.
- Business Corporations Act, sections 314 and 316, BC Laws, King's Printer, act current to 13 October 2026, read 21 October 2026.
- Voluntary Dissolution Application, BC Registries, Corporate Online help, read 21 October 2026.
- Sole proprietorship, Canada Revenue Agency, page dated 17 August 2026, read 21 October 2026.
- How the free estimate works, Succession Market, valuation page, read 21 October 2026.
- How a sale works, Succession Market, process page, read 21 October 2026.
- How the free sale plan works, Succession Market, sell page, read 21 October 2026.
Who publishes this
Succession Market publishes this guide from Kelowna, British Columbia. We help owners navigate the sale of their business.
This guide is general information, not tax or legal advice for a particular sale. Your lawyer papers the deal and your accountant advises on tax. Both are yours to choose.