Buying a business in Canada always comes down to the same structural fork: buy the assets, or buy the shares of the corporation that owns them. Textbooks say buyers prefer assets and sellers prefer shares, and that’s usually true. But when the business is an Amazon FBA brand, there’s a wrinkle the textbooks don’t cover, and it often decides the structure before tax planning gets a vote.
The Amazon account problem
Amazon’s policy is that seller accounts generally are not transferable. A new owner is expected to open a new seller account and start over on account history. Amazon’s help pages do say it may allow account details to be updated in situations like mergers, acquisitions, and legal entity changes, and that’s the opening: if you buy the shares of the corporation that holds the seller account, the entity operating the account hasn’t changed. The account, its performance history, its seller feedback, and its category approvals can carry on, subject to Amazon verifying the new owners. This only works if the account is actually registered to the corporation you’re buying. If the seller opened it in their personal name or through a different company, buying the shares won’t bring it with you.
Buy the assets into your own new company and you start with a new seller account. The product pages and their customer reviews belong to the listings, not the account, so they can usually follow the brand if Brand Registry and the listings are moved over properly. What doesn’t come with you is the account’s own track record: its seller feedback, its performance history, and any category approvals. That’s why the seller account can push a deal toward shares even when the buyer walked in wanting assets.
Amazon’s rules and enforcement change, so confirm the current transfer position on your specific deal before you let it drive a six-figure structure decision.
What an asset deal gets you
In an asset purchase you pick what you’re buying: inventory, brand and trademarks, supplier relationships, product listings content. The corporation’s past stays with the seller, which means its tax history and most of its unknown liabilities generally stay behind too. You also generally get to set your tax cost in the purchased assets based on how the price is allocated in the purchase agreement, which improves your deductions going forward.
The catch is sales tax. GST or HST generally applies to the taxable assets you buy. When a buyer takes over the business as a going concern, the buyer and seller can often jointly elect under section 167 of the Excise Tax Act to make the sale without GST/HST. But the conditions have to actually be met, which usually includes the buying company being GST/HST registered, and the election has to actually be filed. Deals get this wrong regularly. A missed or invalid election can surface later as a CRA assessment for the GST/HST that should have been charged, plus interest, and the purchase agreement usually decides who ends up carrying that cost.
What a share deal gets you
In a share purchase you buy the corporation itself. The seller account, supplier agreements, and operating history continue undisturbed, and there’s no GST/HST on a purchase of shares. Sellers also tend to push for share deals because of how their side gets taxed, which gives you room to ask for a lower price in exchange for agreeing to buy shares.
The trade is that you inherit everything. Every tax year the corporation filed, or didn’t, every GST/HST return, every liability nobody mentioned, all of it is now yours. There’s no fresh tax cost in the underlying assets either. A share deal is not worse than an asset deal, but it moves the risk onto the buyer, and that’s exactly when financial and tax due diligence stops being optional. Our FBA due diligence checklist covers what to verify on the financial side.
How the going-concern election works
The election is available where the buyer acquires all or substantially all of the property needed to carry on the business. CRA reads “substantially all” strictly, generally as 90 percent or more of that property. Both parties sign form GST44, and the purchaser has to file it with CRA on time, which can be soon after closing. Whether a given FBA deal qualifies, especially one that carves assets out, is a facts question worth settling before signing, not after.
Frequently asked questions
Can you transfer an Amazon seller account to a new owner?
Generally no. Amazon expects a new owner to open a new account. The practical exception is continuity of the legal entity: if the account is registered to a corporation and you buy that corporation’s shares, the account can carry on, subject to Amazon’s verification requirements at the time.
Should I buy the assets or the shares?
On many Canadian FBA deals the seller account pushes toward shares and the risk profile pushes toward assets. Which one wins depends on the account’s value, the corporation’s history, the price adjustment on offer, and the tax cost of each route. It’s a modelling exercise, and the answer differs deal to deal.
Do I pay GST/HST when I buy the assets of a business?
By default GST/HST applies to the taxable assets. On a qualifying going-concern purchase, a joint section 167 election can remove it, provided the conditions are met and the election is filed properly.
Is there GST/HST on a share purchase?
No. Shares are a financial instrument and buying them isn’t subject to GST/HST. That simplicity is one of the quiet attractions of a share deal.
Related guides
- Amazon FBA due diligence (our buy-side review service)
- Amazon FBA due diligence checklist: what a CPA verifies before you buy
- How to verify an Amazon business’s real revenue
- Accounting for Amazon sellers
- GST/HST for e-commerce businesses
- Corporate tax
Structuring an FBA purchase right now?
We advise buyers on Canadian FBA acquisitions: deal structure, the GST/HST side, and fixed-fee financial due diligence, from a CPA firm that sells on Amazon. Talk to us before the purchase agreement is drafted, because that’s when structure is still cheap to change.
Related guides
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