Keeping it confidential

Sometimes secrecy is a good thing, especially when planning the sale of your business in a small community. M&A Advisor Trisha Mossey, CPA, CA gives some tips on how to keep things hush-hush during this crucial business transaction

One of the charms of living in Atlantic Canada is that many of our communities are close-knit. That is to say, your neighbors, coworkers and friends know a little more about you than you’d sometimes like to share. Not to imply that you’re up to no good! But if you were, they’d probably know about that, too.

When you’re a business owner there are many things, small and large, that you need to keep private (employee compensation immediately comes to mind). But especially when you’re planning to sell your business, confidentiality is critical. 

Why so secret?

There are a few ways in which lack of privacy can harm your business (if your response is that you won’t be the owner for much longer, think about the value you want your business to retain as you get ready to sell). For one thing, rumours of a sale or acquisition can cause insecurity and instability among management and employees; they may look for other opportunities or devote less of their energy toward the success of the company if they feel its future is uncertain.

It is also important to maintain confidentiality with respect to clients and customers, who may take their business elsewhere if they feel yours is on uneven footing. They may also be hesitant to bring new business your way if they think you are undergoing significant organizational changes that could limit the attention or care you give to clients.

What you can do

First of all, resist the urge to spread the word. Telling employees, suppliers, even too many family members and friends about your plans to sell can be a recipe for trouble. You don’t want to stir a pot that’s already bubbling away nicely, and you really don’t want to be approached with questions from worried staff when you are unable to provide all the answers yet.

To limit the amount of gossip that goes around and to make sure idle ears aren’t hearing things they shouldn’t, avoid holding important meetings in your office regarding an upcoming sale or merger. Even if no one hears what’s being said between you and the potential buyer, people may jump to the obvious conclusion.

Working with a broker or advisor can assist with privacy concerns and significantly lessen the time put in by you. Remember, the process of selling or merging your business can take months, even years. An experienced M&A advisor will handle this side of things competently and save you hours every week in the process.

What you should look for

There are several ways that M&A firms or brokers can ensure your transaction is handled as confidentially as possible. One area of obvious concern is the storage of data and personal information relevant to your business. At MRSB Mergers & Acquisitions we take the storage of information seriously, using stringent folder permissions to ensure that only designated team members have access on a need-to-know basis. MRSB also makes use of a secure virtual data room for sensitive client information. Potential buyers are invited by M&A staff to log in to view specific information regarding the seller of interest. Buyers are required to sign a confidentiality agreement prior to gaining access to any seller information.

Another concern, as mentioned above, is how to hold critical meetings leading up to a sale when there is real potential that others will become wise to your plans. On the part of your broker or advisor, a private boardroom used only for M&A clients is one good way of heightening privacy. Another is to have access to more than one entrance so that clients can arrive and leave separately. MRSB’s M&A division is housed in its own section of the office, with a private boardroom and access to both front and back entrances. It may seem unnecessarily cautious at times, but clients who require this level of privacy (and many do) appreciate the extra steps taken to ensure it.

Living in a small town, news of an important business sale will always spark the interest of local entrepreneurs, clients and even your neighbors. This can be a very good thing, depending on how fast you want to sell and how many potential buyers you want to attract. Finding the balance between this natural form of promotion and keeping things under wraps is a fine balance – one that MRSB M&A advisors are keen on achieving. 

MRSB set for this year's Stuff for Students campaign

What is Stuff for Students?

This campaign is a yearly call for Islanders to purchase and donate school supplies for students in need on Prince Edward Island. Around August 1st the Admin Team at MRSB will be placing a big, empty cardboard box in our lunchroom and inviting staff – and anyone else who would like to get involved – to drop off school supplies and non-perishable lunch food items.

Why do we do it?

Despite our small population there are many kids on PEI who unfortunately aren’t able to pack a sustaining lunch for school or to own a full set of school supplies. We have been taking part in this campaign for several years and always get a great box full of ‘stuff’.

What gets put in the box?

Notebooks, binders, pencils and pens, erasers, glue sticks, markers and non-perishable lunch items are all common donations. Some like to get a little more generous with backpacks, calculators and lunch bags/boxes. Anything a student could use day-to-day, really!

How do the items get to the students?

Typically at the end of August the box is delivered to a community drop-off location by our Admin Team, after which all community donations are distributed to families in need. 

How can I get involved?

Anyone is certainly welcome to drop off items to MRSB’s lobby or to a communal drop-off location. Keep your eyes and ears out for more information via local media.



New foreign property reporting

On July 8, 2014 the Canada Revenue Agency released a new version of form T1135 Foreign Income Verification Statement. After July 7, 2014 taxpayers who have over $100,000 of foreign property and investments must use the new form to report information about their “specified foreign property”  for 2014 and later taxation years.

There are several new items and clarifications on the revised form:

The T3/T5 reporting exception has been eliminated. Taxpayers must report all “specified foreign property” even if the income from it is included on a T3 or T5 slip.

The instructions clarify what exchange rate to use for foreign currency conversions.

The explanation of what is included in the definition of “specified foreign property” is changed to point out that shares of a Canadian company that are held outside Canada are considered “specified foreign property”. This would also apply to other Canadian investments that are held outside Canada.

A new category is added to the form for reporting “specified foreign property” that is held in a Canadian securities dealer account. This new category allows taxpayers to report totals by country for “specified foreign property” held in a Canadian securities dealer account, rather than reporting the details for each item in the account. The taxpayer can report country by country totals for each account, or for each securities dealer they have an account with.

CRA’s announcement and links to the new form can be found at