Growth, succession or sale: three key moments when your tax structure can make all the difference

Growth: supporting expansion without falling into traps

When a company is thriving, most of the energy naturally goes toward action, acquisitions, financing, and new markets. But without early tax planning, growth can quickly turn into a minefield.

Maxime recalls the case of an entrepreneur who began selling a division without consulting his advisors. The price was right, the opportunity promising, but his structure didn’t meet the criteria for the small business capital gains exemption. Without reorganization, he would have lost several hundred thousand dollars in taxes.

This situation reflects an everyday reality: a tax structure may work perfectly during operations but become unsuitable once a sale or financing project begins. “Ideally, your business strategy and your tax structure should evolve together. One without the other inevitably creates friction,” he explains.

A well-designed structure not only helps avoid pitfalls but also unlocks potential. Ensuring interest expenses are deductible, optimizing access to investment or innovation tax credits, or adjusting employee allocation to qualify for incentive programs, these are all ways to accelerate growth rather than hinder it.

Succession: passing the torch without slowing down

Transferring a business, especially within a family, raises both human and tax challenges. For many years, selling to your children was actually penalized from a tax perspective. “Before 2024, intergenerational transfers were almost discouraged,” recalls Maxime.

Recent federal and provincial reforms have corrected this imbalance, but the rules remain complex: a dozen criteria must now be met to qualify for the capital gains exemption.

Beyond the numbers, Maxime highlights another key factor: the transfer of knowledge and values. “The younger generation wants to modernize, digitize, innovate and that’s essential. But they also need to learn from the previous generation, who built the company’s reputation and customer service. The success of a succession lies in blending both worlds.”

To keep tax from becoming a barrier, he emphasizes the importance of planning and of mindset. “Baby boomers often tried to avoid paying taxes at all costs, even if it meant slowing progress. The new generation understands that paying some tax is part of moving forward. The key is not to let tax drive business strategy.”

Sale: maximizing value, minimizing losses

Selling a business requires long-term preparation, ideally, 3 to 5 years. Tax considerations must be part of the process from the start.

“The loss of the capital gains deduction is the most expensive mistake an entrepreneur can make,” warns Maxime.

A properly structured company can not only access this exemption but also benefit further through a family trust. Each beneficiary—spouse, children, or grandchildren—can claim their own exemption. “In some families, this can represent several million dollars,” he points out.

At Forvis Mazars, this integrated approach makes all the difference. “We act as the quarterback of the transaction,” explains Maxime. “We coordinate the tax, due diligence, financing, and transaction elements to make sure nothing critical falls through the cracks.”

That synergy between tax, accounting, and financial experts can turn a complex transaction into a long-term success for both the seller and the buyer.

Conclusion: Tax planning as an evolving process

Tax planning isn’t a one-time task, it’s a continuous thread throughout a company’s life. It supports every phase: growth, succession, sale, and even sometimes downsizing, when it’s time to refocus on what truly matters.

“Opportunities often come sooner than expected,” concludes Maxime. “Those who take the time to anticipate see a real difference.”

Thinking about growth, succession, or a sale in the coming years? Let’s talk. Our team can help turn these pivotal moments into actual success levers.