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Susan Ward

Make Sure You Close Your Corporation When You're Done With It

By November 16, 2013

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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.

Older man sitting in chair in home office.

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

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