Selling a business is one of the most important financial decisions an owner will ever make, and yet most founders wait too long to prepare. If you are serious about maximizing value, minimizing tax, and ensuring a smooth transition, you need a business exit strategy, not a last-minute scramble. In this blog, we break down what it takes to get your business sale-ready, how to qualify for the Lifetime Capital Gains Exemption (LCGE), how corporate structuring for sale can make or break your outcome, and why succession planning belongs in every founder’s roadmap.
Sunny and Parveen from Advisors Table walk through the key steps, pitfalls, and practical strategies that separate successful exits from costly mistakes.
Why Exit Planning Matters — And What Most Founders Get Wrong
When we talk about business exit planning, most founders think about the end moment. The signing day, the handshake, the celebratory check.
But Sunny cuts straight to the truth:
“A sale isn’t a single event — it’s years in the making.”
If you wait until an offer arrives, you’ve already missed your best opportunities.
— Sunny, Advisors Table
In fact, most business owners don’t even start thinking about an exit until one of these happens:
- A buyer proactively approaches them
- They’re burning out or ready to retire
- An unexpected life event shifts their priorities
- They realize their advisors are giving conflicting advice
By then, the ideal window to optimize your structure, your tax position, and your leadership succession has passed.
The Anatomy of a Sale-Ready Business
A sale-ready business isn’t defined by how much revenue it makes — it’s defined by how easily it can be transitioned to a new owner without disruption.
Key Characteristics of a Sale-Ready Business:
✔ Consistent financial performance
✔ Clean and complete books (audit-ready)
✔ Strong management team capable of operating independently
✔ Clearly documented processes and systems
✔ Contracts and leases that transfer smoothly
✔ Tax-efficient ownership structure
✔ Minimal reliance on the founder’s personal involvement
Sunny highlights:
“If your business can’t run without you for a few months, a strategic buyer will discount your valuation or walk away.”
— Sunny, Advisors Table
What Good Exit Planning Looks Like
Exit planning isn’t a checklist you finish a week before selling, it’s an ongoing process that involves:
1. Corporate Structuring for Sale
Making sure your company is positioned for a tax-efficient, marketable exit. This often includes:
- Separating operational assets from investment or non-core assets
- Structuring holding companies and subsidiary entities
- Ensuring your shares meet the criteria for favorable tax treatment
Structuring is especially important for minimizing taxes on company sale Canada, where poorly organized assets can trigger unnecessary taxation and compliance complexity.
2. Tax Strategy Execution (Early and Strategically)
One of the most powerful tax tools available to Canadian business owners is the Lifetime Capital Gains Exemption (LCGE).
The LCGE allows eligible founders to shelter up to $1.25M in capital gains tax-free on the sale of Qualified Small Business Corporation (QSBC) shares — but strict conditions must be met.
Sunny explains:
“Most founders think they’ll walk away with a big cheque — they don’t realize how easy it is to lose the LCGE if your structure isn’t compliant.”
— Sunny, Advisors Table
To qualify for the LCGE, you must ensure (among other criteria):
- Ownership of shares for at least 24 months
- 50% of assets used in active business during that period
- 90% of assets used in the business at the time of sale
If passive investments, cash, or unrelated property are sitting in the company, they may disqualify you.
3. Estate Freeze for Business Owners
An estate freeze is one of the most underused yet powerful tools in exit planning.
Instead of taking all future growth as personal income — and paying tax on it eventually — an estate freeze allows you to:
- Lock in the current value of your shares
- Let future growth accrue to others (children, trusts, etc.)
- Multiply LCGE eligibility for family members
- Reduce your personal tax burden over time
Parveen emphasizes:
“An estate freeze isn’t just tax planning — it’s a roadmap for passing your legacy forward in a way that protects your family and the business.”
— Parveen, Advisors Table
Succession Planning: More Than Just a Buy-Sell
Not every business owner wants to fully exit and that’s okay.
Succession planning provides options such as:
- Internal succession to family members
- Management buy-ins or employee ownership plans
- Partial exits while retaining minority interest
- Structured vendor financing
Sunny states:
“Succession planning is less about stepping away, and more about making sure your business — and the people who depend on it — remain secure.”
— Sunny, Advisors Table
Whether you plan to sell next year or in a decade, having a clear succession map ensures operational continuity and reduces emotional stress when the time comes.
Real Case Insight: What Happens When You Wait Too Long
In the Advisors Table episode, Sunny and Parveen walk through scenarios where owners waited too late to optimize their structure.
In one example, a founder assumed his tax exposure would be manageable. But once the due diligence began and the buyer’s accountant started digging, it became clear that:
- Passive investment assets invalidated QSBC status
- Years of unstructured cash buildup increased taxable capital gains
- Fragmented corporate entities triggered compliance issues
- Missed historical planning opportunities reduced LCGE access
The end result: a lower sale price and a much higher tax bill than necessary.
This is why proactive business exit strategy planning is not optional — it’s foundational.
Why Founders Who Plan Early Win
Founders who invest time in planning see real, quantifiable benefits:
Better valuation multiples
A clean, predictable business attracts more buyers and higher multiples.
Lower tax bills
Proactive strategies like LCGE optimization, estate freezes, and purification put more money in your pocket.
Smoother negotiations
When your IDs, books, and documents are in order, buyers trust you — and deals close faster.
Less stress, more options
You’re not forced into the first deal that comes along — you choose the right one.
A Practical Roadmap for Business Owners
Here’s a simple sequence to follow:
- Begin exit planning at least 3–5 years before you intend to sell
- Discuss LCGE eligibility and QSBC requirements with trusted advisors
- Review corporate structure to align with the sale strategies
- Consider an estate freeze if suitable for your family goals
- Prepare talent and management to operate independently
- Document processes, contracts, and financial records — always
- Simulate sale scenarios to understand tax and valuation outcomes
- Coordinate your accountant, lawyer, and tax advisor as a team
This isn’t transactional, it’s strategic.
As Parveen puts it:
“If your advisory team is just filing returns, you’re leaving real value — and real money — on the table.”
— Parveen, Advisors Table
Final Thoughts: Your Business Deserves a Thoughtful Exit
Your business represents years of dedication, risk, and resilience.
A well-structured exit ensures that you protect your financial outcome, legacy, and family.
If you have not begun planning, the best time to start is now.
Exit planning is not only about selling. It is about ensuring that when you sell, you do it right.
