Selling a business confidentially: when to tell…

You have a serious buyer, a signed non-disclosure agreement (NDA), and a team that has started to notice closed-door meetings. Most owners treat the question of when to tell staff as a test of nerve. When you are selling a business confidentially, the timing depends mostly on three facts: what your NDA and letter of intent (LOI) allow, how the deal is structured, and who has to know before closing.

Settle those three facts and the timing mostly follows. Leave them open and the news tends to come out on someone else’s schedule.

Your staff are already uneasy

Owners often hold back because they fear the news will unsettle people. In the current BC market, many employees are unsettled already. The Canadian Federation of Independent Business (CFIB) reports that more BC businesses have closed than opened for five consecutive quarters. The same CFIB release says 27% of BC small businesses describe their condition as weak or critical.

Ownership change is also more common. The Business Development Bank of Canada (BDC) says in its fiscal 2026 annual report that demand for business transfer capital increased as owners worked through succession, restructuring, and growth under tighter conditions.

In that setting, silence does not reassure anyone. Your staff will fill a gap in information with the worst version they can imagine. What protects both the deal and your people is a plan that says who learns what, and when.

What BC law says happens to employees in a sale

Four rules shape the timing in British Columbia. Each one changes what you can honestly tell staff, and when.

Employment continues through the sale. Under section 97 of the Employment Standards Act, if all or part of a business is disposed of, the employment of its employees is deemed continuous and uninterrupted by the sale, for the purposes of the Act. A sale does not reset the clock. Ask your employment lawyer how that affects service-based entitlements such as termination pay, and who will carry them after closing.

Group terminations have fixed notice periods. Section 64 of the same Act applies if 50 or more employees at a single location are to be terminated within any two-month period. The employer must give written notice of group termination to each affected employee, any certified union, and the minister. Notice must be given at least 8 weeks before the first termination for 50 to 100 employees, 12 weeks for 101 to 300, and 16 weeks for 301 or more.

Union proceedings bind the buyer. Under section 35 of the Labour Relations Code, when a business or part of it is sold, the purchaser is bound by all proceedings under the Code before the sale. Those proceedings continue as if no change had occurred.

Termination pay is a selling cost. CFIB lists termination compensation, notice and/or severance, among the less obvious costs of selling when existing employees do not stay with the business.

Together, these rules mean deal structure decides what you can promise. If everyone moves across, you can tell staff their employment continues. If some jobs end, someone owes termination pay, and a large reduction at one site starts a statutory notice clock that may fall before closing.

Selling a business confidentially, in three stages

A staged plan matches disclosure to the deal’s progress. Read your NDA and LOI before you start, because they may limit what you can share and with whom.

Stage one: a small inside circle under NDA. During due diligence, the buyer will want financials, contracts, and payroll records. Someone has to pull them together. Keep this group as small as the work allows, often a controller or senior manager. Put each person under a confidentiality agreement and agree a cover explanation for unusual requests.

Stage two: key people, at a defined point, with retention terms. Buyers usually want to meet the managers who run the business before they commit. Agree with the buyer in advance when that will happen, often once the main deal terms are settled. Bring those people in with something concrete: a retention or stay arrangement that rewards them for seeing the transition through. Telling a key manager without one invites them to start looking elsewhere.

Stage three: the full team, at signing or closing. Tell everyone once you can answer their real questions. Those questions are about jobs, pay, length of service, and who they will report to. An announcement made before you have those answers usually causes more anxiety than it relieves.

Silence does not reassure anyone. A plan that says who learns what, and when, does.

Statutory notice can override this order. If the deal involves group terminations under section 64, the notice dates are fixed by law, and your schedule has to fit around them.

What to have ready for the announcement

Prepare written answers before the meeting. Staff remember the first version they hear.

Whether their job continues, and with whom.
How the sale affects their length of service, confirmed with your lawyer.
Whether pay, benefits, and reporting lines change at closing.
For unionized workplaces, how the sale affects the union relationship.
Who they can talk to with follow-up questions.

Coordinate the message with the buyer. If you each say something different, you lose trust on both sides.

The exception: selling to your employees

One kind of deal reverses the logic. If the buyer is your staff, through a management buyout, a group of employees, or an employee ownership trust (EOT), they cannot stay outside the circle. They need time to organize, arrange financing, and decide whether they want to own the business.

This route is more common than many owners assume. BDC, citing CFIB, reports that about 23% of exiting owners intend to sell to their employees. BDC also notes that advisers usually suggest starting an exit strategy at least two years before the exit. A full succession can take up to five years, and as many as 10 for a family business.

An internal sale needs early, open conversations with the people who might buy. EOTs and other employee-ownership structures also carry tax consequences, so involve your accountant or tax adviser before you raise the idea with staff. Our earlier note on business succession options compares internal and external routes.

Before you say anything to staff

Surbiton does not give legal or tax advice. Bring in an employment lawyer before you announce a sale or change any terms of employment. They can confirm how sections 97 and 64 and the Labour Relations Code apply to your deal.

Then write your disclosure plan on one page. List the people in each stage, the trigger for moving to the next one, and the answers you will give at the announcement. Share it with the buyer and your lawyer before due diligence starts. If you are still getting the business itself in order, start with preparing your business for sale.

Our succession practice works with owners on this sequence.