Almost every province and territory in Canada, including the federal jurisdiction, will require a company that is incorporated in that jurisdiction to file annual returns. This is not the same as the company’s tax return. Annual returns are required by the Companies Branches of the provincial and territorial jurisdictions in Canada. Annual returns are forms that request information about the registered office address, the mailing address, the business address, the directors, the officers and occasionally the shareholders of a company. The provincial or territorial governments require companies registered under them to update their information on a yearly basis and most impose a small fee for the filing of these annual returns.
What is the Consequence of Not Filing An Annual Return for Your Canadian Company
If your company does not file its annual returns within 2 to 3 years your company will be dissolved for non-filing. Then you have to revive your company and this can be expensive. If you need to revive your company, you will be expected to pay in some cases as much as if you were incorporating the company and as well will be expected to pay for all or at least two years of the outstanding fees for the annual returns that you did not file. This will involve the preparing of a number of documents and you may need to obtain a solicitor to assist you. Each Canadian jurisidiction has a different policy but generally it is a great deal of trouble and extra expense to have to revive your company. Therefore, it is important that you ensure you understand what the legislative requirements are for your company. Under the individual sections listed above, you will be able to determine the requirements for your company with respect to filing of annual returns and how you can meet them.
Say for instance you operate your business and do not bother to file annual returns. You decide after three years you want to close the business down and to date you have made profit but have not filed any tax returns. Just because your company has been dissolved for non-filing of annual returns or possibly tax returns will not mean you get out of paying the taxes owed on that company. The federal government will still expect you to pay your taxes. This would be the case whether you made money or did not make money. If your company has been dormant for a number of years and you allow your registration to lapse for non-filing of tax returns you will at some point be requested to file those tax returns. This could be costly if you have to hire someone to catch up on 10 years of returns.
Do Sole Proprietorships Have to File Annual Returns
Sole proprietorships in Canada do not have to file annual returns. However, the federal, provincial and territorial governments in Canada do expect you to ensure all information about your sole proprietorship is current so ensure that you have filed an amendment to your registration with respect to the mailing and business addresses of your company.
Do Partnerships Have to File An Annual Return
Partnerships in Canada do not have to file annual returns however the federal, provincial and territorial governments in Canada expect you to ensure all information about the partnership is current including addresses, the names of the partners, any changes in the partners and their addresses.
Public Information On Annual Returns
The information contained on the annual returns is filed in the public database and updated each year. This means that anyone can order a copy of the record of your company in order to ascertain your registered office address or who the directors are. Some provinces honour the privacy legislation and allow you to include an address for service for a director or officer of the company which can be your office address and other provinces and territories are still insisting on home addresses to be included on the form.
Extra-Provincial or Extra-Territorial Company Annual Returns
Every company in Canada who is carrying on business in a province or territory other than the province or territory in which it was incorporated, must also in some cases file annual returns each year. Refer to the section called Extra-Provincial and Extra-Territorial Registrations for more information about these types of registrations and when your company is required to be registered. Therefore if you are registered in 8 provinces to carry on business you will be required to file 8 annual returns each year.
If you are carrying on business in another province or territory you should review the statute requirement in that province or territory with respect to the definition of “carrying on business” which definition may differ slightly per province or territory. If you need to be registered then you must register as an extra-provincial company or extra-territorial company, as the case may be, and you will in most cases also be required to file an annual return in that jurisdiction as well. The section on Extra-Provincial and Extra-Territory Companies will explain what the requirements are per province or territory.