When an entrepreneur is thinking of selling or transferring his business to the succession, he usually has two main wishes: obtain the best possible price and ensure the transfer of a healthy business to the buyers.

This is why Raymond Chabot Grant Thornton experts guide the transferors in maximizing the attractiveness and value of the company’s shares, and to facilitate its transfer to new owners.

Sometimes known as business staging TM, this process optimizes the value of a business. It usually takes five to ten years to go through every stage of such a process. It is therefore a good idea to initiate the process as soon as the entrepreneur starts considering a sale or a transfer that will occur in the next few years.

A diagnosis of the business

Raymond Chabot Grant Thornton’s experts first meet the entrepreneur to discuss his objectives and the time at his disposal. Then they produce a diagnosis of the business. What are its internal strengths and weaknesses in terms of finance, management practices, operations and human resources? What are its external strengths and weaknesses, particularly in relation to its market positioning: is the business stagnant or in decline?

Thirdly, the experts establish a list of actions to make up for the company’s deficiencies and assess the relevance of each. Let’s take the example of a company that has to make up for a technological lag regarding its equipment. Will the purchase of new technologies increase the company’s value sufficiently so that the invested cost is worth the trouble? The time required to perform each action is also evaluated.

A concrete action plan

The entrepreneur and the experts then choose the actions to be performed and produce a concrete action plan, including the people responsible and the deadlines. Here are some examples of possible actions: install an accounting system to manage inventory, look for new distributors to increase sales, improve the organizational structure by giving more responsibilities to certain employees, documenting the processes and instituting policies and procedures in order to leave traces of the seller shareholder’s knowledge, etc.

In addition to increasing the company’s market value, the optimization process reduces the risks related to the contractor’s rushed departure, due to health problems, for example, and the risks related to “latent defects”, because there won’t be any more. It is also very reassuring for the seller to know that he is handing over a healthy business that has every chance of survival (whether to his children, employees or a third party).

A business makeover

While the optimization process may sometimes seem long, it is worth it. Often the transaction will happen faster because of the process. A healthy business attracts more potential buyers and the buyers’ requests for financing are accepted more easily.

Raymond Chabot Grant Thornton’s experts give the business a real “makeover”, for the greater benefit of the seller or transferor… and the buyer.


TM Fasken Martineau

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United States – Canada FATCA Intergovernmental Agreement released

The long-anticipated United States – Canada Intergovernmental agreement (IGA) was released on February 5, 2014.

The Foreign Account Tax Compliance Act (FATCA), enacted by the US Congress in 2010, requires foreign financial institutions to use certain due diligence procedures to identify US persons who have invested in either non-US financial accounts or non-US entities. The intent behind FATCA is to keep US persons from hiding income and assets overseas, as US persons are required to report to the Internal Revenue Service (IRS) on their worldwide income regardless of their residency. FATCA will start to become operational on July 1, 2014. The US Treasury has entered into intergovernmental agreements with many countries in order to alleviate some of the burdens associated with FATCA compliance.

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2014 budget: transitioning towards a budget surplus

Employment still at the forefront

On the eve of an election year, Finance Minister James M. Flaherty opted to stay the course towards a balanced budget in 2015, banking primarily on employment support to drive economic growth.

Thus, the Economic Action Plan 2014 tabled today does not include any new taxes on families and businesses and balancing the budget in 2014 will generally rely on freezing departmental operating expenses. The conservative government projects that the deficit will decline to $2.9 billion in 2014–2015, with a surplus of $6.4 billion expected in 2015-2016, after taking into account a $3 billion annual adjustment for risk.

More forceful measures to further support the competitiveness of Canada and its businesses will most likely be announced next year in a more favourable budget context.

The following pages provide an overview of the budget’s tax measures.

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Navigating the changes to IFRS: a briefing for chief financial officers

The Grant Thornton International IFRS team has published the 2013 edition of Navigating the changes to International Financial Reporting Standards: a briefing for Chief Financial Officers. This publication has been designed to give chief financial officers a high-level awareness of recent changes that will affect companies’ future financial reporting.

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