Closing a business in Canada is a straightforward task, although it involves more than just notifying customers, selling off remaining inventory, and settling debts. Additionally, it is necessary to formally terminate your business name or dissolve your corporation, as well as close your tax accounts with the Canada Revenue Agency (CRA) and the applicable provincial tax authorities. Otherwise, without proper documentation indicating otherwise, your business will continue to be considered active, and you will be required to continue filing various tax returns.
While the process may have slight variations depending on the province, the guidelines for Ontario, Quebec, and British Columbia can serve as a useful reference. To ensure compliance with local regulations, it is advisable to seek guidance from a tax or accounting professional.
Overall, managing all the necessary steps simply involves completing and submitting the appropriate forms.
Make sure you have a checklist handy to ensure that you complete all the required tasks when shutting down your business:
- If you are running a sole proprietorship or partnership, cancel your business registration.
- In the case of a corporation, voluntarily dissolve it and make sure to file the final tax return.
- Close your payroll accounts with the Canada Revenue Agency (CRA), ensuring all necessary paperwork is properly handled.
- Close your GST/HST accounts with the CRA, as well as your PST accounts with the appropriate provincial agency.
Canceling a Business Registration in Canada
If you have a sole proprietorship or partnership, the process of canceling your business registration differs in various provinces, both in terms of the names used for the necessary forms and whether they are paper or online formats.
To cancel your business name registration in Ontario, visit the Service Ontario website and navigate to the “Change of Business Information” page.
In Quebec, closing a business is referred to as “Striking Off an Enterprise.” To proceed with closure, you must submit a Declaration of Striking Off to the Registraire des Enterprises. For general or limited partnerships, you need to submit a Dissolution and Liquidation form to the same entity.
In British Columbia, you can cancel your business registration conveniently by accessing the Business Development Centre website.
In Alberta, the process of canceling a business registration can be completed by utilizing the services of an authorized registry agent.
Dissolving a Corporation in Canada
If you’re looking to shut down a corporation, you’ll need to dissolve it. This can be done by passing a special resolution during a shareholder meeting or obtaining written consent from all shareholders eligible to vote. If a corporation has not issued shares or started operating, it has a two-year window from the date of incorporation to dissolve, granted it has permission from the incorporators.
In Ontario, you’ll need to submit the appropriate articles of dissolution to the Companies and Personal Property Security Branch, along with a letter consenting to the dissolution from the Corporations Tax Branch, a cover letter, and pay a $25 fee.
In Quebec, you’ll need to submit the following items to the Registraire des enterprises:
- Declaration of Intent/Application for Dissolution of a Company or Nonprofit Legal Person form.
- A certified copy of the by-law or resolution that authorizes the submission of the application for dissolution.
- Either the full page of the newspaper in which the intent to dissolve was published or a clipping that includes the name, date, and place of publication.
- The annual declarations required by the Legal Publicity Act.
- An application for the revocation of striking off.
In British Columbia, you’ll need to file an Application for (Voluntary) Dissolution on the provincial Corporate Online website. It’s important for the company to have its annual report filings up to date.
In Alberta, you’ll need to file an Articles of Dissolution Form with an authorized service provider.
Payroll Accounts and Tax Returns
When you are ready to finalize your payroll accounts, make sure to send all CPP contributions, EI premiums, and income tax deductions to your tax center within one week after your business concludes. Additionally, you must fill out the required T4 slips and T4 Summary and deliver them to the Ottawa Technology Centre within 30 days of your business’s closure.
To properly close your business number accounts, the CRA suggests completing Form RC145, a request form, and submitting it along with your final return.
When you submit your final tax return to the CRA, remember to enclose a copy of the articles of dissolution as well. Otherwise, the CRA will assume that your corporation continues to exist, and you will be obligated to file an annual tax return for the corporation indefinitely, even if there are no taxes to be paid.
GST, HST, & PST Accounts
To wrap things up, you will need to close your accounts related to the goods and services tax (GST), harmonized sales taxes (HSTs), and provincial sales taxes (PSTs). Ensuring that all outstanding GST/HST returns have been filed and any outstanding amounts have been paid, you should proceed by submitting Form RC145 to the CRA.
For those in Quebec, Revenu Quebec handles both the GST and its PST, known as the Quebec Sales Tax (QST). To finalize your registration cancellation for either the GST or QST, it is necessary to submit Form FP-611-V 410 (Request for Cancellation or Variation of Registration) to Revenu Quebec. Keep in mind that as a general rule, you should request cancellation for both your GST and QST accounts to take effect on the same date.
If you reside in British Columbia, closing your PST account can be done conveniently by filling out an online form accessible through your eTaxBC account.
In the case of Saskatchewan, make sure to file a final PST return within 15 days of closing your business. Additionally, remember to return your vendor’s license and obtain confirmation that all remaining taxes have been paid.
Lastly, if you have acquired a business license to operate in a specific town or city, it is essential to notify the municipality about the closure of your business. This step prompts them to cancel your license accordingly.
CBES is here to assist you; feel free to contact us for expert guidance.