Available virtual corporate tax practice – This niche and highly profitable practice with 90% recurring work operates as a tax outsourcing practice. The founder and staff are located in the Toronto area, but given the virtual nature of the practice, the purchaser does not have to be located in Toronto. The practice was established by the current owner-practitioner almost 30 years ago, and has approximately nine major clients. Its clients, most of whom have been clients for many years, include subsidiaries of multi-national companies, as well as Canadian based public and private companies with foreign subsidiaries. Recurring work (approximately 90% of annual billings) includes preparation of corporate income tax returns, T106 forms, T1134 forms, T2200 forms, SRED financial claims, M&P and labour tax credit claims, and NR4 forms; annual and quarterly accounting for income taxes and financial statement note preparation; assistance with taxable benefits and transfer pricing documentation; and dealing with tax auditors, tax payments and refunds. The remaining 10% of annual billings includes special engagements such as audit defense work, corporate reorganizations and recapitalizations, loss carryforward utilization, sales tax recoveries, etc. (The founder will retain unrelated personal income tax return work.) The practice is completely virtual (and has been since prior to COVID) and the two full-time staff and one part-time hourly staff member work remotely or at major clients’ offices. Revenues have ranged from $600,000 to $700,000 in recent years (up to 2020). Due to the expiry of a contract with one customer in June 2021, revenues are expected to be lower in 2021 at $480,000. The founder is offering shares for $600,000. The founder is willing to assist in transition as required, and is planning to fully retire from the practice.
The ideal acquirer of this practice should have a good knowledge of non-CCPC income tax rules and practice. The successful purchaser will have a great opportunity to acquire a stable client base with low overhead; expand the existing business, revenue and cash flow; and enhance their existing client service offerings.