Running a business through a corporate structure provides many benefits. It also comes with a set of yearly obligations so the corporate entity remains in good standing. Let’s take a look.
Prepare financial statements and file returns
Every year, your corporation must prepare its financial statements and file tax returns within six months of its year-end date. For example, if your fiscal year ends on March 31st, then the filing due date is September 30th.
File the GST/QST
Businesses that meet certain conditions must register to collect the GST and QST on behalf of the Canada Revenue Agency and Revenu Quebec respectively. The filing frequency, either monthly, quarterly, or annual, depends on your remittance period. In some cases, Revenu Quebec will assign a filing frequency to companies meeting a total annual taxable sales threshold in Canada.
For monthly or quarterly GST/QST returns, the due date is generally one month after the end of the period covered. For annual returns, the due date is no later than three months following the end of the period.
File the annual return
Your corporation must file an annual return with the appropriate corporate registry. Federal corporations must file two updating declarations, one with Corporations Canada and another with the Registraire des entreprises du Québec (the “Registraire”). Provincial corporations only need to file an annual updating declaration with the latter.
As of 2024, it costs $12 to file the annual return with Corporations Canada and $101 for a Quebec corporation to file with the Registraire.
Failure to comply with these filing requirements can result in fines, penalties, and in some cases, the administrative dissolution of your corporation. It’s important for companies to keep these obligations in mind and ensure they are meeting them before their deadlines to remain in good standing.
Update the minute book
A business’ year-end is also the time to update the corporate records. This includes:
Approving and ratifying the financial statements.
Reelecting the directors and officers of the corporation
Updating any structural changes to the corporation.
Updating the directors, officers, and securities registers
Since June 2019, federal corporations must also create and maintain a register of individuals with significant control. As of January 2024, certain information relating to these individuals will also be available online. To learn more about the individuals with significant control register, read our blog post on the topic.
A lot of companies, especially start-ups, will omit these necessary task. Consequently, when it comes time to sell the business or apply for a bank loan these documents are not up to date or ready for inspection. In addition to fines, this can create extra delays and add costs to update years of corporate history.
Through our corporate maintenance service, you can set these obligations on autopilot and have peace of mind knowing that your company is always up to date. We’ll file the necessary documents, pay the government fees, and update and store your minute book. Get in touch with us to find out more.