Emilio B. Imbriglio
President and Chief Executive Officer | FCPA, FCA, MBA, CFE, ICD.D.

To expand your vision of your business’s future, talk to outsiders with complementary expertise.

Emilio B. Imbriglio, Raymond Chabot Grant Thornton President and CEO, relates his experience in setting up a board of directors for a Québec SME. He explains the process to create a competent and efficient board by choosing key players.

16 Aug 2018  |  Written by :

Mr. Imbriglio is partner and the President & CEO of Raymond Chabot Grant Thornton. He is in charge...

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Quebec is in urgent need of entrepreneurial successors. A recent study conducted by the Business Development Bank of Canada (BDC) revealed that about 37% of the province’s owners plan on disposing of their business in the next five years.

In more than half of the cases, the transferors plan on transferring their business to someone outside of the family.

If you have an MBA, this is an exceptional opportunity to take on new and exciting challenges. But maybe you don’t see yourself as an entrepreneur who must oversee everything. So why not join a group of transferees?

With globalization, businesses must be able to count on a set of specialized, complementary skills in order to remain competitive. This is why today, SMEs, traditionally managed by a sole owner, are generally transferred to a group of two or three transferees. The formula can vary: for example, people from outside and employees from the business can team up with the transferor’s child.

MBAs often have the skill set wanted by a transferor, a team of transferees and money lenders. So, it’s possible to integrate into a team of transferees by taking on a key management position in the SME. Your skills might even be considered as an interesting down payment.

Furthermore, taking over a business is much more advantageous and less risky than creating one. In fact, an established SME already comes with a certain reputation, clients, a network of suppliers and distributors, equipment, a proven modus operandi, etc. What’s more, during the progressive transfer of ownership, transferees benefit from advice from the transferors.

You can turn your avant-garde project into reality if you acquire a business with the right characteristics. It would certainly be a great challenge to revolutionize an SME that you just acquired, even if it operates in a traditional sector! Think about how Tesla has revolutionized the automobile industry…

How to proceed

Are you ready for such an adventure? What’s important is to know yourself well and seriously consider your ambitions with the help of your family.

The best way to assess your aptitudes is to complete a psychometric test, which will help determine whether you have the profile of an entrepreneur or a manager. Several firms offer this kind of test and can also offer a professional development plan.

Next, find out from your network and entrepreneurial ecosystem in your region which SMEs are looking for transferees. Our firm, Raymond Chabot Grant Thornton, can also provide you with efficient support in this process and bodies, such as the Centre de transfert d’entreprise du Québec (CTEQ), can put you in touch with transferors and other transferees.

Are you managing an SME that will transfer ownership in the coming years? If you would like to be part of a team of transferees, we recommend expressing your interest sooner rather than later.

Transferors prefer to hand over the reins of their business to people they know since the transfers are usually progressive and come with a balance of sale. Lenders will be more inclined to finance your project if you know the business well, its industry and challenges.

Prevent under-investment

As business managers (or future transferees), MBA graduates can also play a pivotal role in reversing a trend in the Quebec economy that is cause for some concern: under-investment in SMEs, particularly those on the verge of a transfer.

Various studies have shown that as retirement approaches, entrepreneurs are more inclined to protect their wealth than grow their business. They are especially unwilling to add debt to the balance sheet, and, as a result, reduce their productive investments, which hampers the business’s competitiveness in the long run and lowers its market value.

For you, as a manager, one solution would be to encourage and help the owner of your SME to create a solid succession plan. This plan would detect the various challenges related to the transfer of ownership (financial, legal, human, strategic issues, etc.) and lay the proper foundation for the transfer process steps.

You would therefore participate in the development of a strategic plan that sets out the growth objectives and investments required to succeed: a plan that would make the transferor feel more secure and make him or her more willing to invest.

Quebec has many entrepreneurial success stories. Let yourself be inspired by them and continue the tradition!

This article was first published on the AMBAQ website.

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Taxation in Québec: Favourable Measures to Foster Investment is intended specifically for foreign companies considering carrying out an investment project in Québec.

It provides an overview of the principal tax measures that apply to companies operating in Québec.

In addition to very attractive tax measures, Québec has given Investissement Québec specific tools that enable it to act as a financial partner to businesses. Although this brochure focuses on tax issues, Québec provides businesses with a range of financial solutions that complement those offered by financial institutions. These solutions may include conventional loans, loan guarantees, non-refundable contributions or equity interests.

The information in this brochure was up to date as at May 1, 2018, and does not reflect any modifications that might have been announced subsequent to that date. Monetary amounts are expressed in Canadian dollars.

This brochure is for information purposes only. It does not substitute for legislation, regulations or orders adopted by the Québec government.

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Online Tax Strategies−July 2018−ITC recapture: Phase-out update in Ontario and Prince Edward Island

It is finally happening! The ongoing compliance and recapture restrictions that large business have had to contend with since 2010 in Ontario are finally going away. While the changes are very welcome, ensuring your organization is prepared and correctly accounting for the change is almost as important as the initial reporting was to ensure that your organization is no longer absorbing the tax, or a portion of the tax, as a cost—a concept that effectively is contrary to the basics of a value-added tax regime.

The specific provisions previously applied to large businesses— organizations that exceeded $10 million in taxable and zero-rated revenues during their last fiscal year (including all sales made by associated entities). These organizations were required to recapture a portion of their input tax credits (ITCs) claimed in respect of the provincial part of the HST paid or payable on specified property and services in Ontario and Prince Edward Island.

Download the document below for more information.