Keeping Your Canadian Corporation Compliant

Your Canadian Corporation is Your Biggest Asset

Your Canadian corporation is your baby. If you’re like most entrepreneurs, your small business is your life blood. Learn how to take care of it so that it grows and takes care of you in return.

Canadian Corporation Requirements

The Canada Business Corporations Act (CBCA), says you need to fulfill certain conditions with Corporations Canada (CC)

There are also time demands, as in you have to file information returns at least once a year. It could also be quarterly or monthly. Requirements change too, so you need to keep an eye out for new letters and communications. You must do the following on a regular basis:

File an Annual Return

Corporations Canada needs current information about your company. They get this by having you fill out an annual questionnaire. It is much cheaper to file online than by mail.

File a Change of Registered Office Address

The government needs your address to send you letters. When your address changes, you must file your new address with Corporations Canada.

File Changes Regarding Directors

The directors of the corporation are the people responsible for it. When directors change, everyone needs to know about it. To complete this, Form 6 is filed online the same way as most other forms for your Canadian corporation.

Amending Canadian Corporation Articles

From time to time, you may need to change your corporation’s articles. Use Form 4 and file it online for faster processing.

You Must File an Annual Return

All active corporations need to file an annual return. Dissolved corporations do not need to file an annual return unless Corporations Canada has specifically said otherwise. If you do not know the status of your company, search your federal corporation and it will tell you.

Federal Canadian Corporation Annual Returns

An Annual Return is not a Tax Return

Annual returns are different from tax returns. File your corporation’s annual return with Corporations Canada. Submit your company’s tax return, called a T2, with Canada Revenue Agency (CRA).

Federal Canadian annual returns require a signature from a person who is authorized by the directors and has knowledge of the company. If you are not sure that you have the right person signing, hire a CPA firm to consult on the matter. Make sure you are filing correctly.

How to File Your Annual Return

Corporations Canada lets you file online, by email, or by mail. They charged $12 CAD to file online, and $40 to file by mail or email in 2021. Their rates are subject to change at their discretion. You could be saving money by filing online.

Purpose of the Annual Return

Corporations Canada wants to make sure your corporation complies with CBCA. The annual return gives them the information they need to assess that.

The database of federal corporations needs to be kept up to date. And Corporations Canada uses information from the annual returns to accomplish that. Investors, consumers, financial institutions and many others use annual returns to make informed decisions about your corporation.

Deadline to File Your Annual Return

Your Canadian corporation’s annual return is due with 60 days of the anniversary date. The date on which your corporation was created, incorporated, continued or amalgamated is your anniversary date. If you created your corporation on March 1, your annual return is due May 1.

Sometimes dissolved or discontinued corporations are revived. The anniversary date is always the date when the corporation was created or continued.

If you need to find your anniversary date quickly, search your corporation on the Corporations Canada website.

Never file your return early. They do not accept early returns. Corporations Canada wants to know the company’s specific situation on the anniversary date.

Filling your Canadian corporation’s annual return is very important. If you are late, you can’t get a certificate of compliance. Without this certificate, you won’t be able to get business loans and investors will be unlikely to support you.

Canadian Corporation Reminder Notices

Corporation Canada realizes business owners are busy. That’s why they send reminders around 90 days before the annual return is due. This notice gives you all the info you need to file. If you do not file on time, you’ll get a default notice 90 days after it was due.

Subscribing to email reminders saves paper costs and speeds up the time it takes for the reminder to get to you. If you don’t subscribe to this, you will get your reminders in the mail. And like with your corporation’s address, you’ll want to update your email address if that changes too.

Non-Compliant Canadian Corporations 

A dissolved corporation cannot do business legally. If you do not file your annual returns, Corporations Canada can dissolve your corporation.

Some corporations, especially small businesses, might not always be aware of these filing needs. The law allows Corporations Canada to end a corporation after one year of non-filing. But their policy is to only dissolve a corporation when it has not filed an annual return for two years.

After that period ends, Corporations Canada will send a final warning. And then they provide an additional 120 days to file the required returns. This final notice will be sent by post to all valid addresses Corporations Canada has on file (including current directors’ addresses). Further, the name of the dissolved corporation is published in Monthly Transactions.

If the corporation does not respond, Corporations Canada will issue a certificate of dissolution following the expiration of the deadline stated in the notice.

Dissolving a Canadian Corporation

If you’re no longer operating you can dissolve your corporation, which means that you are legally ending it. You can revive a Canadian corporation after it has been dissolved too.