Closing A Business

business closed sign

Original Post Date: Dec 12, 2019

There may come a time when you decide to close your business for a variety of reasons, whether your business is no longer in operation or you are changing to an incorporated company.

If you have decided that you no longer want to or can no longer keep running your business, closing the business registration or corporation is an easy process. Depending on whether you are registered as a small business or incorporated, there are different steps involved in shutting things down. But, with either type of business, there are a number of things you will want to consider before and after you close business operations.

What Are Some Reasons You Would Cancel Your Business Licence?

There may be any number of reasons why you are looking to close down a business registration or corporation, including:

Closing down a business can be a very difficult decision, but we are here to make it easy to shut down a business and move on to the next step.

Do I Have To Cancel My Business?

One question that business owners often have is whether there are requirements to formally cancel their business registration or corporation if they are no longer operating. Although we cannot advise whether you must cancel your business registration, if it is not cancelled, it will remain an active business registration. This means that until a Master Business Licence passes its expiry date, it will show up in the system as a registered and active business. For corporations, there is no expiry date and therefore a corporation remains active until it is dissolved.

What Happens If I Don’t Cancel The Business?

Cancelling or dissolving your business helps put an end date to your business operations. This provides a definitive end to your business for any accounts with the Canada Revenue Agency and helps remove future liability or the risk of litigation against your business. Not cancelling your business leaves you open to these risks.

If your registered business or corporation has accounts with the Canada Revenue Agency, you will be expected to continue filing remittances until those tax accounts are closed. The tax accounts can be closed with submission of the cancellation or dissolution documentation with Canada Revenue Agency.

cancel a small business

What Information Do I Need To Cancel My Business?

To cancel your business registration, you will need to provide the same information as you did when you originally registered. To submit a cancellation of a Master Business Licence, we will need the following information:

  • Registration Type (Sole Proprietorship, Firm Name for a General Partnership/General Partnership or Business Name for a Corporation/Trade Name)
  • Business Name
  • BIN (9 Digit Business Name Registration Number, found on your Master Business Licence)  This can be retrieved if you are not sure.
  • Business Activity
  • Name of business owners and their addresses
  • Business Address and mailing address
  • If the licence is for a Business Name for a Corporation (previously called a Trade Name under a corporation), you will also need to provide the Corporate Name, Ontario Corporate Number and head office address of the corporation the trade name operates under.

Cancel My Small Business Today!

The process for filing Articles of Dissolution for a corporation can vary, depending on the jurisdiction of incorporation. For corporations incorporated in Ontario, the Articles of Dissolution under the Business Corporations Act are required.  Within the articles, you must provide whether the corporation has issued shares and that the dissolution is authorized by the shareholders of the corporation or that the corporation has not commenced business.  Secondary to this, you also must provide if the corporation has no debts, obligations or liabilities and if the corporation does, the corporation has provided for its debts and where creditors are involved, consent to dissolve has been given.  If the corporation has any property, confirmation needs to be provided that the property has been distributed to its shareholders, that there are no pending court cases, and that all notices and returns required under the Corporations Information Act are up to date.

Prior to October 19, 2021, a corporation would be required to contact the Canada Revenue Agency to apply for a Consent to Dissolve Letter.  This was typically a long, tedious process by either the shareholders or an accounting professional acting on behalf of the corporation.  The Consent to Dissolve is now part of the Ontario Articles of Dissolution filing.  The Province of Ontario and the Canada Revenue Agency work in tandem to provide the Consent Letter to Dissolve.  The directors, shareholders or professional accountants are no longer required to do any outreach to CRA to receive.  Now, the Consent to Dissolve can take up to thirty days to be provided  and therefore the Articles of Dissolution are not completed until this task is rendered.

If you are filing the Articles of Dissolution directly with the Ontario government, you must first obtain a Company Key for your corporation.

What Is a Company Key?

The Company Key is a 9 digit sequence of numbers provided exclusively to your corporation.  Obtaining the Company Key is not mandatory and the Ontario Articles of Dissolution can be filed directly with us as an intermediary with the Province of Ontario This simplifies the process and expedites the timeframe to complete the dissolution.

To obtain the company key, you must have an up to date corporate address as the company key is mailed to the corporate address.  If the corporate address is not up to date, a Notice of Change is required to update the corporate address information first.  Once you are sure your corporate address is up to date you can reach out to the province and request your company key.  The Company Key is  mailed to the  corporate address and can take several weeks.

Federal corporations do not require a consent letter to dissolve; however, the directors must confirm that there are no debts owed by the corporation.

Dissolve Ontario Corporation

Dissolve Federal/Canada Corporation

Should You Sell Your Business Or Close It?

If your business is still profitable, you may want to consider whether you can sell your business and transfer the ownership to another individual. Not only will it save you the costs and process involved to close your business, but you can profit from the sale as well.

Small business registrations cannot be transferred to a new owner’s name – instead, the new owner can simply complete a new business registration using the same business name.

Corporations are much easier to transfer ownership of, making the director additions and removals through filing a Notice of Change. The corporation maintains its history and any program accounts with the Canada Revenue Agency, bank accounts, or other accounts can be transferred to the new business owners.

If shares are also being transferred, changes to the shareholder registry can be completed through a corporate lawyer. Selling a corporation to a new owner may be a great option for both parties involved. It allows the current owner to avoid dissolving the corporation and provides the new owner with an active corporation that has potentially established a credit history, customer base and business relationships.

What Other Things Should You Consider After You Close Your Business?

After your Master Business License has been cancelled or your corporation dissolved, there are a few things you will want to ensure are done in order to shut down operations entirely:

  • Notifying the closure of your business to the Canada Revenue Agency
  • Complete and file the final tax return for the business
  • Pay any outstanding tax amounts
  • Close accounts associated with the business (Ex: Bank, HST account, payroll account)
  • Let any merchants and clients know
  • Pay/Close out any outstanding accounts or bills
  • Close any city/town or municipal permits

After closing down a business, you will also want to keep your cancellation documents or Articles of Dissolution in your records for future reference.

How Long Does It Take To Close The Business Registration?

It generally takes one business day to complete the cancellation of a Sole Proprietorship, Firm Name for a General Partnership / General Partnership or Business Name for a Corporation / Trade name from the time we receive the order until the licence has been cancelled. A stamped cancellation form is electronically sent to you. We will also send a completed copy by mail to the mailing address as provided on the form.

Articles of Dissolution in Ontario can be completed within one business day once the corporation has received the consent letter to dissolve from the Ministry of Finance.

Can I Restart A Business After Cancelling?

The short answer to this is yes. Although there are two different processes, depending on if your business registration was a Master Business Licence or corporation.

A Master Business Licence cannot be restarted once cancelled. Instead, you can simply register a new Master Business Licence using the same information including the same business name as previously registered. If you wish to operate a different business name or provide a different address or activity for an owner, you may also do this. This will be viewed as a completely new registration with no affiliation to the previous registration.

Even after filing Articles of Dissolution, corporations can be revived and will remain in the corporate registry. A new NUANS name reservation may be required for named corporations, depending on how long ago the corporation was dissolved. Different jurisdictions offer name protection for varying lengths of time after a corporation has dissolved. The specifics for your corporation would be required to ascertain the access to bringing the corporation back into existence

If you are interested in reviving your corporation, contact our office today to obtain a custom quote to assist with this filing: or 1-416-599-9009

What Happens If One Business Partner Wants To Cancel And Another Does Not?

If you have a Firm Name for a General Partnership, previously called a General Partnership, registered and one partner no longer wants to operate the business, you have two options. You can file an amendment to remove the partner who no longer wants to be involved as long as two or more partners remain on file. If only one partner remains, you can either add another partner to replace the one leaving or cancel the General Partnership and register as a Sole Proprietorship using the same business information.

Corporations can operate with a single director, so business owners can be removed if they no longer wish to be a part of the business as long as one director remains. A Notice of Change can quickly and easily update the directors of a corporation on file. To completely remove a partner and protect all parties from any risk, liability and access associated with the corporation, it is recommended to file the appropriate paperwork with a corporate lawyer as well.

If you are the one saying ‘I want to close my business and walk away,’ you will want to ensure you are removed from all registrations and accounts related to the business, in order to remove yourself from all future liability for the business.

What Happens To Assets When A Business Closes?

After ensuring that all of the business’s outstanding debts and liabilities are settled, you can begin liquidating any remaining assets. The assets of a company could include things such as furniture, supplies, equipment and more. Essentially, what you are doing is selling off anything of value and turning it into cash. The cash can be used, if needed, to pay off any remaining business debts or distributed amongst the business owners if possible.

Can You Close Your Business With Debt?

Most jurisdictions of incorporation in Canada require a letter of consent or confirmation from the owners that the business does not have any outstanding debts before it can dissolve. Declaring bankruptcy is not an option for corporations, as the corporation cannot obtain a letter of consent or file Articles of Dissolution if it is bankrupt.

Small business registrations are connected directly to the individuals that own them, so any debts owing for the business are the personal responsibility of the owners to take on. A small business registration can be closed, even if there are still debts for the business because all debts would fall on the shoulders of the owners themselves.

Do I Have To Pay Corporate Tax If I Close My Company?

A final tax return for the business or corporation will be required for the CRA as a requirement to closing a business.  An Ontario incorporation requires the corporation to fully settle any tax accounts owing prior to being given consent to dissolve. In some other jurisdictions this is not required. If the CRA is not notified that the business has ceased, they will continue expecting to receive filings for the tax account and any other accounts registered with them, such as an HST account or payroll account.

If the business is registered as a sole proprietorship or Firm Name for a General Partnership / General Partnership, the final tax return is included with your personal tax returns.

How Should I Prepare To Close?

Once you have decided to close business operations, you will want to start making your business plan for winding down and exiting your business before the closure actually happens. One of the first things to do is stop taking on new work unless it fits within your business plan and timeline to close. You will want to ensure that you fulfill any orders already received before closing operations.

It is a good idea to notify everyone of the upcoming closure, including customers, suppliers and business partners. No one knows what the future will bring, so it’s always a good idea to avoid burning bridges or ending on a negative note. Keeping everyone in the loop allows them the chance to find a new business to fulfill their needs rather than catching them off-guard.

If you want more information about how to shut down a business, or if you have decided it is time to close your business or dissolve your corporation, Ontario Business Central can help.

Close a Business

File Ontario Articles of Dissolution

File Federal Articles of Dissolution

Our helpful and knowledgeable staff are here to assist you along the way, and if you have any questions, we encourage you to reach out with any questions you may have.
Toll-Free: 1-800-280-1913
Local: 1-416-599-9009
Fax: 1-866-294-4363
Office Hours: 9:00am – 5:00pm
Monday – Friday E.S.T.

Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.