Closing your business
If you are planning to close your business, there are a few things you should consider, such as notifying Canada Revenue Agency (CRA), filing a final tax return, paying any outstanding tax amounts, and financing your succession planning.
Legal and financial obligations
Here is a list of things you should do if you are planning to close a business:
- Cancel your business registration for your sole proprietorship or partnership OR
- Voluntarily dissolve your corporation
- File a last tax return, if you have dissolved a corporation
- Close your RST/PST/QST accounts with the appropriate provincial agency
- Close your payroll accounts with the Canada Revenue Agency (CRA)
- Close your GST/HST accounts with CRA
- Closing accounts
When closing your business, remember to complete the required Canada Revenue Agency forms.
Dissolving a corporation
When the time comes to dissolve your corporation, there are several factors to consider. In the same way you undertake certain formal procedures to create a corporation, you must file forms with the government to dissolve it. Dissolving your corporation is the legal act of ending its existence. Under the Canada Business Corporations Act, you need to obtain a certificate of dissolution by applying to Corporations Canada.
You must also close the relevant Canada Revenue Agency accounts (payroll, GST/HST and corporate income tax) and provincial tax accounts, and tie up other loose ends.
- Ensure that the corporation's directors authorize the dissolution of the business
- File the articles of dissolution with Corporations Canada
- File all applicable tax forms
- Notify creditors
- Settle creditors' claims
- Distribute remaining assets
Remember that if yours is a federally incorporated company, you must keep it in good standing by filing an Annual Return to Corporations Canada every year. This is in addition to the tax return you must file with Canada Revenue Agency. As a penalty, Corporations Canada may dissolve your corporation without your permission if you do not keep it in good standing, so be sure to report any changes in information.
Follow these guidelines if you are planning to dissolve your corporation:
- Corporations Canada: Dissolving a corporation
Learn the steps to take and what forms are needed to obtain approval for the legal termination of your corporation under the Canada Business Corporations Act.
Financing your succession planning
Here are some options for financing your succession planning:
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