For owners who can't find an outside buyer — or would rather not sell to one — there is now a way to sell to the people who already run the business, and keep it in the community.
Can't find a buyer for your business? For thousands of Canadian companies — especially outside the big cities — the most realistic buyer has been inside the building all along.
A trust is created to hold the company's shares for the benefit of employees. The trust buys your shares — typically funded by the company's future earnings rather than employees' savings — and you're paid over an agreed period, with security protecting what you're owed. Employees don't write cheques; they earn ownership by keeping the business successful, which is what protects your payout.
Done well, it can answer the three things that sink a small-market sale at the same time: there is no obvious buyer, there is no financing, and there is no succession plan. Done badly, it leaves you waiting years for payments from a company you no longer run. The structure is what makes the difference.
The EOT feasibility assessment is a flat fee, quoted individually before we start. It answers the go / no-go question — whether your business and sale qualify under the current rules, the exemption analysis with your accountant, and the payout and security options — with alternatives if an EOT isn't the right fit.
An Employee Ownership Trust is a Canadian trust structure, introduced in recent federal budgets, that holds shares of a business for the benefit of its employees. It lets an owner sell the business to their employees as a group — without requiring the employees to come up with the purchase price personally, because the business's own future earnings fund the buyout over time.
Federal rules provide a capital gains exemption of up to $10 million on a qualifying sale to an Employee Ownership Trust — dramatically larger than the standard lifetime capital gains exemption. Two things owners often miss: the $10 million is shared among all sellers on the same business transfer, not $10 million each; and the exemption was originally time-limited to sales before 2027, but Parliament repealed that sunset in June 2026, so it is now a permanent measure. Strict conditions apply to the business, the trust, and the transaction, alternative minimum tax can affect the result, and the exemption can be clawed back if conditions are broken afterward. Whether your sale qualifies — and whether it can close in time — is exactly what our feasibility assessment answers.
The owner sells the shares of the business to a trust whose beneficiaries are the employees. The trust usually pays part of the price at closing, financed by the company, and the balance over several years out of the company's own earnings, so the employees do not fund the purchase personally. The company continues to be run by its management under the trustees' oversight, and the trust must hold a controlling interest in a qualifying business that meets the federal conditions. The result is a sale at fair value for the owner and an employee-owned business that stays independent.
An ESOP (employee share ownership plan) gives individual employees shares or options they hold personally, so ownership is spread across many small holdings and leaves when people do. An employee ownership trust holds the shares collectively for all qualifying employees, which keeps control in one place, avoids the churn of buying back departing employees' shares, and is the structure the federal $10 million capital gains exemption attaches to. Canada's ESOPs also have no dedicated tax incentive of that kind.
Yes. The EOT rules are federal Income Tax Act provisions, so a qualifying business anywhere in Canada can be sold to one. Provincial law still governs the trust itself and the corporate steps, which is one of the reasons the structure should be set up by counsel who work in your province.
An EOT fits owners who want the business to stay independent and local, who trust their team, who have no natural third-party buyer, and who are willing to be paid out over several years rather than all at closing. For many businesses in smaller markets — where outside buyers are scarce — the employees are the most realistic buyer in the room.
Twenty minutes tells us whether an EOT is worth exploring for your business — and if it isn't, we'll say so and show you the alternatives.
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