Work backwards from the sale of the records
When a survey firm sells, the buyer is not paying for used trucks. The price is the plan library: the field notes, deposited plans and project files that every future retracement in the firm's territory will start from, plus the client list attached to them. The AOLS expects survey records to end up in a member's custody when a practice winds down, which is one more reason a sale to a successor beats a shutdown, and it means the value you have been building is real and transferable.
The planning question is how that value comes out taxed. A share sale can put the lifetime capital gains exemption, now $1.25 million per qualifying shareholder, against the gain, but only if the corporation passes the qualified small business corporation tests: shares held 24 months, and the balance sheet kept clean of surplus investments both at sale and through the holding period. A firm that has parked years of retained profit in a portfolio inside the operating company fails quietly. Purification, often by moving surplus into a holding company, is restructuring work that takes years to age properly, so it starts long before a buyer appears.
Know the share-sale gap before an offer exists
| Share sale | Asset sale | |
|---|---|---|
| What the buyer takes | The corporation whole, records and open files inside | Chosen assets: records, client list, instruments |
| Seller's tax | Capital gain, sheltered up to $1.25M by the LCGE if the tests pass | Recapture on the fleet plus a corporate gain, then tax again when the cash comes out |
| The C of A | Stays with the corporation, with AOLS kept informed | The buyer practises under their own |
| Groundwork | 24 months of balance-sheet housekeeping first | Little groundwork, more tax |
Buyers usually open by asking for assets; sellers should know what the difference costs before negotiating. We price both routes on real numbers so the concession, if you make one, is priced into the deal instead of donated.
In between: retain through the cycle, pay the family within TOSI
Survey revenue rides the development cycle. When approvals and housing starts run hot, subdivision and severance work stacks up; when rates bite, the same crews chase SRPRs and fence lines. Profit retained in the corporation is taxed at about 12.2% on the first $500,000, which makes the corporation the shock absorber: hold back in the strong approval years, keep the household draw steady through the slow ones. Once the surplus becomes a portfolio, watch the $50,000 passive-income line, past which the small business limit starts shrinking.
Family pay has more room than in most professions, because a survey corporation is an ordinary Ontario corporation with no statute limiting who may hold shares. TOSI still governs the dividends, and the excluded-share exit rarely helps a firm earning its income from services, so the doors that actually open are practical ones: reasonable wages for genuine work, a spouse running dispatch or the records room, dividends to a spouse once the principal turns 65, or a family member averaging 20 hours a week in the business. We design the shares and the pay together in our Tax Planning & Advisory work, not the shares first and the problem after.
The fall agenda, after the crews come in
Planning for a survey firm has a natural season: late fall, when field capacity winds down and the year can still be shaped. One sitting covers the short list that moves money:
- WIP position and year-end: what the open developer files hold, and whether the fiscal year-end still fits the billing rhythm; the filing detail lives with the corporate tax work.
- Equipment timing: an addition planned for spring may be worth landing before year-end while the enhanced first-year CCA rules run through 2027; a claim can also be held back in a loss year, since claiming CCA is optional.
- Owner pay reset: the salary-dividend mix re-sized to this year's profit and next year's pipeline, never left on autopilot.
- Instalments and RRSP room: remittances reset off the new numbers so a strong year does not dictate a slow one's cash.
We run this annually for survey practices across Mississauga and the GTA, with the plan and the returns prepared at the same desk, so what was decided in November is what gets filed in the spring.
