One email I hate to get is the one that starts, "I haven't used my corporation since 20-- (you pick a year), and I was wondering..."
Like most people, I don't like giving bad news, and if you created a corporation and haven't done anything with it in years, then the news can be very, very bad.
You see, corporations don't die from disuse. They are independent legal entities and as such, continue to exist until they are officially dissolved.
Which means if you created one years ago and haven't officially closed it, you are on the hook for years of income tax returns and the tax penalties that relate to not filing your corporate income tax every year as you should have done. Read about the penalties for failure to file your corporate income tax on the Canada Revenue Agency website.
Here are the steps for dissolving a Canadian corporation if you need to do it.
More on Incorporation in Canada
- 7 Reasons to Incorporate Your Business
- Types of Corporations in Canada and Corporate Tax
- What's the Difference Between Federal and Provincial Incorporation?
- What Is Extra-Provincial Incorporation?
- Incorporation in Canada FAQs
- How to Incorporate in Canada
- How to Get Your New Corporation Up and Running
- Salary or Dividends - How Do I Pay Myself?
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