What determines whether an Ontario company or a foreign company licensed in Ontario is in good standing and can obtain a favourable Ontario Certificate of Status?
In order for a company to obtain a favourable Certificate of Status the factors taken into consideration by the government are:
– the status of the company’s Ontario Annual Return filings required pursuant to the Corporations Information Act (Ontario), and
– the status of the company’s T2 Corporation Information Tax Return filings required pursuant to the provisions of the Income Tax Act (Canada).
Relationship of Ontario Annual Return Filing Requirement and an Ontario Certificate of Status
Ontario corporations incorporated pursuant to the Business Corporations Act (Ontario) and foreign business corporations licensed to carry on business in Ontario pursuant to the Extra-Provincial Corporations Act (Ontario) are required to file their Ontario Annual Return with Canada Revenue Agency within six months after the end of each tax year.
Ontario Share Corporations are required to file a Schedule 546 together with their T2 Corporation Information Tax Return.
Foreign business corporations are required to file Schedule 548 together with the C2 Corporation Information Tax Return.
The Ontario government is very lenient about these filings in comparison to most other provinces and territories. It will allow a company to be behind in its Ontario Annual Return filings and T2 Corporation Information Tax Return filings for three or more years before it will dissolve a company. It will also provide the company with adequate warning if its charter is going to be cancelled.
A Certificate of Status will be able to be obtained for an Ontario corporation as long as the company has not been dissolved for the above-referenced filings or it has not violated any of its registration statute requirements.
However, if the company does not make its filings eventually it will be dissolved. Once the company is dissolved it is no longer in good standing and a favourable Ontario Certificate of Status will not be issued if requested.
If a company is required to provide a bank, solicitor or supplier with a clear Certificate of Status and its company has been dissolved, the company will need to be revived which can be very costly.
You can obtain an Ontario Certificate of Status for a company by requesting same from a Canadian search and registration service.