Corporate compliance…that’s just taxes, right? For many, once the collection of information, preparation and submission of the tax filing is complete, an item is checked off the To-Do List and corporate compliance isn’t thought about for another year.
While completing and filing your corporate taxes is incredibly important – there are other compliance matters required by corporations that are often overlooked.
Annual Resolutions – the law requires that all corporations approve certain matters on a regular basis including, the approval of the financial statements for the last fiscal year, the election of directors, the appointment of officers, the appointment of an accountant, and the waiver of the audit requirement for the next fiscal year. An efficient way to complete this To-Do item is to prepare and sign resolutions of the director(s) and shareholder(s).
Annual Return – this is a filing that is due to the Ontario Ministry of Public and Business Service Delivery every year. Until 2021, this filing was often completed by a corporation’s accountant and submitted at the same time the corporate taxes were filed; however, in 2021, the CRA stopped accepting these filings with the corporate taxes and many accountants stopped preparing the filing as part of their process. This filing is the obligation of the corporation and an authorized individual needs to complete this filing annually.
But I’m the sole director, officer, and shareholder of my corporation and nothing has changed for years; that means I don’t need to do any of this, right? Unfortunately, the answer is no.
While the annual resolutions and the annual returns may seem like monotonous tasks, they are very important to the health of your corporation. If these annual maintenance tasks are foregone and you ever decide to sell your business, seek commercial financing, pass your business along to your children, or even if you become unable to manage your own affairs, your corporate records will need to be cleaned up before being able to proceed with your intended plans.
Don’t want to add anything more to your never-ending To-Do List? We’ll take care of it for you. Our corporate team is available to answer any questions you may have – [email protected] This WARDS LAWYERS PC publication is for general information only. It is not legal advice, nor is it intended to be. Specific or more information may be necessary before advice could be provided for your particular circumstances.
