If you are planning to sell or buy a business, the province of Manitoba offers services and a tax credit that may help facilitate a smooth transition in business ownership. CFIB also has some resources to help with succession planning.
Manitoba Entrepreneurship’s Business Succession Resource Centre
Business owners, individuals and employee groups seeking to transition, sell or purchase a business can turn to Manitoba Entrepreneurship’s Business Succession Resource Centre for a variety of support, including:
- Workshops and seminars
- Documents (eg. Business Succession Planning Guide) and checklists
- Information on financing
To learn more about the province’s services, call 204-945-8200 or email [email protected].
Employee Share Purchase Tax Credit
The Manitoba government offers a 45% personal income tax credit to assist employees transitioning to business ownership, called the Employee Share Purchase Tax Credit:
- Employees may buy up to $10 million in shares from their employer and receive a tax credit if the business has a registered Employee Share Ownership Plan (ESOP). Canadian-controlled private corporations with assets of up to $25 million and who pay at least 25% of their remuneration to employees who are Manitoba residents are eligible for ESOPs.
- Employee investments for succession planning, takeover and/or buyout purposes are eligible for a tax credit of up to $202,500 annually (equal to $450,000 in shares purchased). The first $27,000 of the tax credit is fully refundable to the employee. The remaining tax credit amount is claimable against provincial personal income tax incurred in either the 3 years prior to the share purchase year or the following 10 years. An employee may use up to $67,500 of their unused tax credit balance in a single year.
- Employee investments to promote employee ownership or establishing a workers co-op are eligible for up to a $27,000 tax credit annually (equal to $60,000 in shares purchased). The tax credit is fully refundable.
- Shares purchased by the employee, through their RRSP (subject to regulations) or TFSA accounts are eligible for the tax credit.
- Manitoba Finance will process applications to register an ESOP eligible for the tax credit.
CFIB's resources for business succession planning
To help members as they start planning to exit their business, CFIB's first recommendation is to engage one's professional advisors (eg., lawyer, accountant) for their expertise on the important decisions that make up a business succession plan.
CFIB's Business Counsellors are available to help members learn about tools and resources to support business succession planning. Call 1-888-234-2232 or email [email protected]. We look forward to helping you!