Once you have incorporated your professional practice, your legal obligations do not end. You are required to file an annual return with your provincial corporate registry every single year. The deadline for filing this report varies by province or territory. In Alberta and the Yukon, you must file by the 31st of the month following each anniversary month of incorporation. B.C. and Ontario give you 2 and 6 months respectively after the anniversary date of incorporation. You are not required to file this return in the year of incorporation. The requirement begins after one full year of being incorporated.
This is not to be confused with filing your corporate income tax return. The filing of your annual return is a corporate law requirement. It is completely separate from any filing requirements the corporation has with the Canada Revenue Agency (CRA).
Who normally files the annual return and what is required?
Most people use their lawyer to file this annual return. However, you can choose to do it yourself. The information that is required is normally simple and straightforward and normally includes the following:
- Corporate name
- Corporate number
- Year of filing
- Name and address of directors
The costs to file these are normally nominal. The important thing is that it actually has to be done each year.
Why do I have to file an annual return?
In addition to being a requirement of each provincial corporate registry, the annual information you provide is used to keep their database up to date. It is public information through the provincial registry websites and as such allows financial institutions, professional associations and others to make informed decisions about your corporation.
Do I have to file if my corporation is inactive?
The short answer is yes. If your corporation is not dissolved or amalgamated with another corporation, you are still required to file an annual return. This is similar to the CRA’s requirement that all corporations file annual corporate income tax returns regardless of whether it is active or not.
What happens if I don’t file?
Your corporation may be dissolved if it fails to file its annual returns. Technically, the law allows the provincial registry to dissolve the corporation after just one year of non-filing. Administratively, it is normally their policy to only dissolve a corporation after it has not filed for two consecutive years. If your corporation is in danger of being dissolved, they will send a final notice warning of the pending dissolution and provide an additional deadline to file the required annual returns. Dissolution is the legal termination of a corporation. Basically, it means the corporation no longer exists.
If fillings are still not done after all warnings and final deadlines, the corporation will be dissolved. Dissolution can have serious consequences such as:
- The corporation will no longer have the legal capacity to conduct business.
- The forfeiture to the Crown of any real or personal property or assets of the corporation at the date of its dissolution.
- The lapse of corporate limited liability and insurance coverage.
- The inability to apply any tax losses.
Common Reasons for Not Filing
The reason a person may fail to file an annual return is that they moved and did not give the provincial registry their forwarding address. Another reason could simply be not opening your mail on a regular basis or an extended vacation could cause you to miss the deadline. For this reason, most professionals choose to use their lawyer’s office as the address on file with their provincial corporate registry.
Can I revive my corporation?
It is possible to revive your corporation after it has been dissolved. However, you are required to apply for a revival by filing Articles of Revival and paying a revival fee. In addition, all annual returns due for the period both before and subsequent to the dissolution must be filed first. Of course, if there are any related taxes, penalties and interest, these must be paid first as well.