Before you panic and prepare for the feds to shut your business down, there are a few things you should know about the annual return.
When you incorporate in Canada, you’re given the choice to incorporate either federally or provincially.
While the choice is largely based on legal reasoning, federal corporations typically have an extra set of filings due annually called the annual return.The annual return is a legal document that basically notifies Corporations Canada that the company is still active.
They’d also like to know of any changes of the address or board of directors to keep their records up to date. If nothing has changed in the current year, the form is pretty straightforward and can be filed quickly online for a fee of $20.
If you don’t file the annual return, technically speaking, Corporations Canada can dissolve your company. That being said, they typically provide a 2 year grace period for filings which should be ample time to submit it – particularly as the whole process can take less than 5 minutes.
As the annual return is a legal document, many times the company’s legal team will file it as part of preparing the annual resolutions of the company.
If you’re not sure who’s preparing your return, either reach out to your accountant or lawyer, or put it on your annual to-do list to make sure you don’t receive any more daunting notices from Corporations Canada!