Buying an Accounting Practice in Ontario: The Registrar Decides

Last updated 12 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke · Commercial & business purchases · 13 min read

The Registrar has a veto, and no clock

Most buyers worry about the wrong regulator risk. They assume the question is whether they qualify. It usually is not. It is timing and control. Regulation 10-1 requires a firm to disclose changes to its registration information “within 30 Days of the change,” then adds the sentence that matters: “Any changes in the information submitted by a Firm in its application for registration as a Firm shall be subject to the Registrar’s approval.” The CPA Ontario Act separately requires a professional corporation to notify the registrar of a change in shareholders.

There is more on the Registrar’s desk. Regulation 10-1 requires disclosure if the firm or any partner or shareholder becomes the subject of an investigation or discipline by another regulatory body, and lets the Registrar “defer consideration of an application for registration until such time as any disclosed investigation or discipline proceeding has been concluded.” Firm name is Registrar-controlled too: “the Registrar shall be entitled to approve or reject the name, and any change of name, by which the Firm intends to, and does, engage in the Practice of Public Accounting,” and “the Registrar’s decision shall not be subject to review or appeal.” If your plan is to keep trading under the vendor’s name because the clients know it, that is the Registrar’s decision, not yours.

Who may own an Ontario CPA firm

The CPA Ontario Act allows the registrar to accept for registration a partnership, including an LLP, a professional corporation, or any other entity specified by the by-laws. CPA Ontario’s guidance names three structures — sole proprietorship, LLP and professional corporation — and states that only “members of CPA Ontario in good standing” may register a firm.

For a professional corporation the Business Corporations Act governs, because the CPA Ontario Act does not displace it. All issued and outstanding shares must be “legally and beneficially owned, directly or indirectly, by one or more members of the same profession.” All officers and directors must be shareholders, the name must include “Professional Corporation” or “société professionnelle,” a proxy vesting the right to vote a share in a non-shareholder is void, and a unanimous shareholder agreement is void unless every shareholder is a member. CPA Ontario adds that shareholders can be members, other professional corporations registered as firms with CPA Ontario, or both.

And the corporate wrapper dilutes nothing. A member’s obligations to clients “are not diminished by the fact that the member is practising through a firm” and “apply equally to the corporation and to its directors, officers, shareholders, agents and employees,” and on an investigation or inspection “the corporation is jointly and severally liable with the member for all fines and costs.”

Three documents, none of which transfers, and one of them is per office

Document	Who holds it	What happens on a sale
Firm registration and Registration Certificate	The firm, per office	Not transferable. Changes to the registration information need the Registrar’s approval.
Certificate of Authorization	The professional corporation	Issued on application under Regulation 17-1. An expired COA “cannot be renewed”; apply for a new one.
Public Accounting Licence	The individual member	CPA Ontario is explicit: “PALs are issued to CPA Ontario members, not firms.” It is revoked the day the person ceases to be a member.

The Public Accounting Act, 2004 sets the frame: an individual practising public accounting must be licensed, a professional corporation must hold a certificate of authorization, a licensee must be a member of CPA Ontario, and “a person’s licence under this Act is revoked on the day the person ceases to be a member of CPA Ontario.”

Then the detail buyers miss: registration is not per firm, it is per office. Regulation 10-1 says “a reference to the registration of a Firm means the registration of each office of the Firm through which a Member engages in the Practice of Public Accounting or Provides Accounting Services to the Public,” and each names a designated Firm Representative with a business address. Buy a practice with a second location and you are not acquiring one registration with a branch. You have two registered offices.

Practice inspection: what you inherit, and what you trigger

Regulation 18-1 provides that “all Practising Units engaged in the Practice of Public Accounting or in Providing Accounting Services to the Public shall be subject to Inspection.” Three provisions matter to a buyer. First: “a newly established Practising Unit shall be selected for inspection within twelve months of inception of the Practising Unit.” Second: “an established Practising Unit shall be selected for Inspection within three years of the date of its last Inspection.” Third, the one nobody flags: circumstances that may increase inspection frequency include “a significant change in the clients and/or profile of a Practising Unit.”

Read those together as a purchaser. Create a new practising unit and you are on a twelve-month clock from inception. Do not, and you inherit the vendor’s three-year cycle and whatever the last inspection found. And a material change to the client base is itself a stated ground for inspecting more often.

The mechanics are ordinary: a Practice Profile Questionnaire within 60 days of the request, and an inspection that “may take place at the office of the Practising Unit or other location as deemed appropriate, or by submission of documentation.” So the diligence question is not whether the firm has been inspected. It is when, what it found, what was done about it, and whether this transaction resets the clock. I would not buy without the answers.

The vendor cannot surrender on your timetable, and the insurance outlives the deal

Regulation 10-1 lets a firm apply to surrender its registration, but the Registrar “shall not accept” the application where the firm is part of a practising unit under inspection; is the subject of a complaint, review, investigation, proposed settlement agreement or allegations; has not complied with a settlement agreement or order; has not demonstrated six years of discovery insurance under Regulation 14-1; or owes dues. The Registrar may impose conditions before accepting a surrender.

Regulation 14-1 is the part that survives closing. Every firm “shall continue to maintain professional liability insurance in an unreduced amount for a period of at least six years” following the withdrawal of a partner or shareholder, “the merger, dissolution or cessation of practice of a Firm,” or a suspension or deregistration, covering acts or omissions before those events.

That is a six-year cost with a name on it, and it belongs in the price negotiation rather than a surprised phone call in March. Who pays for it, and how it is secured, is a term of the agreement.

Client records, trust money, and the call you must make to the predecessor

On records, the CPA Code of Professional Conduct sets no fixed period. Rule 218 requires retention “for a reasonable period of time” of “such working papers, records or other documentation which reasonably evidence the nature and extent of the work done in respect of any professional service.” The guidance concedes “it is not possible to give an all-encompassing guideline as to what is reasonable” and says “at a minimum, documentation should not be destroyed until legal advice has been obtained with respect to any limitation periods that may apply.”

It then goes further, and this is the part with a floor-area consequence: while a general guideline “might be as short a period as the minimum time period required by statute, some documentation may need to be retained indefinitely,” listing financial statements, agreements and leases, minutes, share capital information, written opinions, tax files and assessment notices, continuity schedules, and estate plans and wills. Client information must also be segregated from firm-proprietary information.

On trust money, Rule 212 requires a member or firm holding money or property as trustee, receiver, guardian, administrator or liquidator to “maintain such records as are necessary to account properly for the money or other property” and, unless the trust says otherwise, to keep trust money “in a separate trust bank account or accounts.” An unagreed retainer for future services is treated as funds held in trust.

And Rule 302 requires the successor to speak to the predecessor before accepting an engagement, “to communicate with such predecessor and enquire whether there are any circumstances that should be taken into account which might influence the decision whether or not to accept the engagement.” On a practice purchase the predecessor is the vendor. That conversation is an obligation, not a courtesy.

Asset purchase or share purchase

A corporation is a separate legal person with “the capacity and the rights, powers and privileges of a natural person.” On a share purchase it keeps owning what it owns and owing what it owes. On an asset purchase you take only what the agreement names.

Question	Asset purchase	Share purchase
Firm registration	Yours to obtain; the vendor’s is not transferable	Stays put, but the change needs the Registrar’s approval
Past liabilities	Only what you expressly assume	All of them, known and unknown
Inspection history	A new practising unit is inspected within twelve months of inception	Comes with the corporation, along with its three-year cycle
Land Transfer Tax if the practice owns its premises	Payable on the conveyance	Shares of a land-holding corporation “do not ordinarily attract tax under the Act”
Employees	ESA s. 9: service with the seller is deemed service with you	The employer does not change
Tax cost base	Set at the allocated price; goodwill enters Class 14.1 at 5%	You inherit the corporation’s existing tax cost

Ontario’s Bulk Sales Act was repealed on 22 March 2017, so the old creditor-notice procedure no longer exists. Buyers rely on contract and searches instead.

HST, the section 167 election, and the receivables election

HST in Ontario is 13%. Two joint federal elections usually matter, which means both are negotiated rather than assumed. The section 167 election applies where a supplier supplies a business or part of a business and the recipient acquires “all or substantially all of the property that can reasonably be regarded as being necessary for the recipient to be capable of carrying on the business or part as a business.” CRA reads that as generally 90% or more of the fair market value of the necessary property, and where the supplier is a registrant the recipient must be one too. The parties jointly complete Form GST44. Three carve-outs survive: tax still applies to a supply of a service, to property supplied by lease or licence, and to a taxable sale of real property where the recipient is not a registrant. See my note on HST clauses in an Ontario agreement of purchase and sale.

Goodwill is separate. Where the business-sale conditions are met and part of the consideration is reasonably attributable to goodwill, “that part of the consideration shall not be included in calculating the tax payable in respect of the supply,” whether or not the election is filed.

The section 22 election covers the receivables. Where a vendor sells all or substantially all the property used in the business, including the debts, to a purchaser who proposes to continue it, a joint election lets the vendor deduct the shortfall between face value and consideration while the purchaser includes the same amount in income. The form is T2022. In an accounting practice the receivables and work in progress are rarely trivial. Your accountant decides, not your broker.

Hire the staff and you inherit their years

On an asset sale, section 9 of the Employment Standards Act, 2000 provides that where a purchaser employs an employee of the seller, the employment “shall be deemed not to have been terminated or severed” and service with the seller “shall be deemed to have been employment with the purchaser for the purpose of any subsequent calculation of the employee’s length or period of employment.” The exception is narrow: it does not apply if you hire more than 13 weeks after the earlier of their last day with the seller and the day of the sale. “Sells” includes “leases, transfers or disposes of in any other manner.”

So the bookkeeper who has run the vendor’s compilation files for a decade is not a new hire because you signed an asset purchase agreement. Statutory notice at eight years or more is at least eight weeks, severance under section 64 is a separate test capped at 26 weeks’ wages, and common-law notice is larger again and belongs to employment counsel.

Financing: the goodwill limit that surprises people

Two further details. The purchase and sale agreement “should set out the allocation of the purchase price for each of the assets listed in the agreement,” because that allocation substantiates which assets are eligible against which ceiling. Put it in the first draft.

And eligibility has hard edges. Gross annual revenue must not exceed $10 million. A holding corporation is not an eligible borrower, and a trust does not qualify at all. Related borrowers who cannot pass the independent small business test share one $1 million term-loan ceiling and one $150,000 line-of-credit ceiling, and that test requires separate businesses in different premises with neither deriving more than 25% of its gross revenues from the other. If your plan is an opco plus a realty holdco, check both before you structure it.

What an Ontario CPA practice sells for

There is no credible published figure. CPA Ontario publishes its registration, inspection and insurance regulations, not transaction values. The closest Canadian government source is the Financial Performance Data benchmarking in Innovation, Science and Economic Development Canada’s Canadian Industry Statistics for NAICS 5412, reference year 2024, covering businesses with $30,000 to $5,000,000 in annual revenue. It publishes revenues and expenses as percentages of total revenue, balance sheet items, ratios, and a profitable versus non-profitable comparison. No sale prices, no multiples.

Every “one times fees” and every EBITDA multiple quoted for a Canadian accounting practice comes from a private intermediary or a United States marketplace. They may be right about their own book. They are not a source, and a number without a source is a negotiating position wearing a lab coat. Hire a valuator who will show you the comparables. Then get the lease looked at, because the premises are the one part of the deal with an observable market. That is why I read the lease clauses and build a lease review condition into every offer.

Does CPA Ontario firm registration transfer when I buy a practice?

No. Registration is granted to a firm, and per office, and there is no assignment mechanism. Regulation 10-1 requires a firm to disclose changes to the information in its registration application within 30 days and provides that those changes “shall be subject to the Registrar’s approval.” A professional corporation must also notify the registrar of a change in shareholders. Treat the Registrar’s approval as a condition of closing, because no published regulation sets a deadline for it.

Can a non-CPA own part of an Ontario accounting firm?

Not a professional corporation. Under the Business Corporations Act, all issued and outstanding shares must be owned legally and beneficially by members of the same profession, all officers and directors must be shareholders, a proxy or agreement vesting voting rights in a non-shareholder is void, and a unanimous shareholder agreement is void unless every shareholder is a member. CPA Ontario states shareholders can be members of CPA Ontario, other professional corporations registered as firms with CPA Ontario, or both. Structuring around that is a question for corporate counsel.

Will buying a practice trigger a practice inspection?

It can. Regulation 18-1 provides that a newly established practising unit “shall be selected for inspection within twelve months of inception,” and that an established one is selected “within three years of the date of its last Inspection.” It also lists, among circumstances that may increase inspection frequency, “a significant change in the clients and/or profile of a Practising Unit.” Before closing, ask when the last inspection was, what it found and what was done about it.

What happens to the vendor’s professional liability insurance?

It has to keep running. Regulation 14-1 requires every firm to “continue to maintain professional liability insurance in an unreduced amount for a period of at least six years” following the withdrawal of a partner, shareholder or member employee, the merger, dissolution or cessation of practice of a firm, or a suspension or deregistration, covering acts or omissions before those events. CPA Ontario will not accept a surrender of registration from a firm that has not demonstrated it will maintain that coverage.

How long do I have to keep the client records I take on?

There is no fixed period. Rule 218 requires retention “for a reasonable period of time,” and the guidance admits no all-encompassing guideline is possible, directing that documentation not be destroyed until legal advice on applicable limitation periods has been obtained. It adds that “some documentation may need to be retained indefinitely,” listing financial statements, agreements, contracts and leases, minutes, investment and share capital information, written opinions, tax files and assessment notices, continuity schedules, and estate plans and wills.

Can I finance the goodwill through the CSBFP?

Only within a sub-limit. Goodwill is an eligible intangible asset “if part of a going concern purchase,” but intangible assets and working capital together are capped at $150,000, inside a $500,000 ceiling for non-real-property purposes, inside a $1,000,000 term loan maximum. For a practice priced mostly on goodwill, that cap usually binds. The program also requires that the agreement set out the allocation of the purchase price across the assets, so build that into the first draft.

Do I have to contact the vendor before taking over their clients?

Yes, as a professional obligation. Rule 302 provides that a successor shall not accept an engagement replacing another member, firm or professional “without taking reasonable steps to communicate with such predecessor and enquire whether there are any circumstances that should be taken into account which might influence the decision whether or not to accept the engagement.” The predecessor must respond promptly. On a practice purchase the predecessor is the vendor, which makes the conversation easier and no less mandatory.

What multiple should I pay for an accounting practice in Ontario?

No Ontario regulator and no Canadian government publication reports CPA firm sale prices, goodwill values or valuation multiples. CPA Ontario publishes regulations, not transaction data. The ISED and Statistics Canada Financial Performance Data for NAICS 5412 publishes operating benchmarks for businesses with $30,000 to $5,000,000 in revenue, and no sale values. Every multiple in circulation comes from a private intermediary or a US marketplace. Use a valuator who will show you their comparables and their reasoning.

Sources

• Ontario e-Laws — Chartered Professional Accountants of Ontario Act, 2017
• Ontario e-Laws — Public Accounting Act, 2004
• CPA Ontario — Regulation 10-1 (Firms)
• CPA Ontario — Regulation 18-1 (Practice Inspection)
• CPA Ontario — Regulation 14-1 (Professional Liability Insurance)
• CPA Ontario — Member’s Handbook, including the CPA Code of Professional Conduct
• Canada Revenue Agency — GST/HST Memorandum 14-4, Sale of a Business or Part of a Business
• Innovation, Science and Economic Development Canada — Canada Small Business Financing Program Guidelines

This is general professional commentary from a Broker of Record on commercial and business acquisitions in Ontario. It is not legal, tax or accounting advice, and it does not create any professional relationship. Whether a licence transfers, how a purchase should be structured, what tax applies and what a regulator will require on your particular file are questions for your lawyer, your accountant and the regulator itself. Rules, fees and published requirements change — verify anything you intend to rely on against the primary source on the day you rely on it.