closing down business sign

Last updated on February 27th, 2020 at 01:51 pm

We often receive phone calls from clients on whether they should cancel their Master Business Licence or Incorporated company if the business is no longer active.

We recommend you do for a variety of reasons.

Public Access

Once you register or incorporate a company, the business is listed publicly within the jurisdiction you set up. The business will remain listed for in some cases a period of time, in other cases continually until a cancelation or dissolution is completed.

Taxation with Revenue Canada

When you set up a business, Revenue Canada usually has data related to that business. If you have filed tax returns either as an individual or on behalf of a corporation, Revenue Canada may anticipate and expect a payment from you or the business even if the business is not operational but remains active.

Liability

As long as a business remains active, there may be concerns regarding liability for this business whether you are still operational or not.

One client’s experience

I had a client call me a few months ago who told me his experience. He had registered a Sole Proprietorship as a Master Business Licence in Ontario a number of years earlier and had done well with the business in the technology sector. He had filed his personal tax returns according to the earnings of the business return over a 3 year period. He was offered employment with a company at a lower income and decided to no longer operate the business. He told me he didn’t cancel his Sole Proprietorship and that Revenue Canada sent him notification to pay the income he had received previously when the business was operational. He stated he had to go back and provide his bank account information, cheques and hire an accountant to assist him in removing the imposed income from his business. If he had cancelled his Sole Proprietorship and notified Revenue Canada that the business was no longer active, it would have saved him the time and costs to prove the business was no longer operational.

Another client’s experience

I heard from another client who had registered a General Partnership with a partner. The partnership didn’t work out but the client didn’t take the step to cancel the General Partnership as a Master Business Licence and allowed the business to continue to operate with his ex-partner in control of the business solely. There became a liability issue for the business and my client was brought into the issue because he remained a partner in the General Partnership.

These are just two stories of many I have heard from clients who didn’t know or didn’t do the important process of cancelling or dissolving a business that no longer existed. If you have any questions or concerns about your business, you may want to speak to an accountant or a lawyer regarding your specific circumstance.

To cancel/dissolve your business

Sole Proprietorship or General Partnership

If you would like to cancel an existing Master Business Licence as a Sole Proprietorship or General Partnership in Ontario, we can assist you to do so.

The cancellation information is the same as what you originally provided when you registered your business but this time, it is to cancel the registration instead of registering. Once the registration is completed, you can notify your bank, suppliers and Revenue Canada that the business is no longer operational.

Cancel Your Master Business Licence

To dissolve an Ontario Incorporation

If you would like to cancel your Ontario Incorporated company, the first thing you require is to contact the Ministry of Finance at 1-866-668-8297 and notify them that you wish to dissolve your corporation and wish to obtain a “Consent to Dissolve”. This is a letter that the Ministry of Finance provides when an Ontario Corporation is dissolving and is up to date on any required corporate tax filings. If you are not up to date, they will confirm what filings are required and once completed, they will provide the letter that is required for you to dissolve your Ontario Incorporation.

If you would like us to assist you in completing the filing of the Articles of Dissolution for your Ontario Incorporation with the Province of Ontario, here is the link to do so.

File Articles of Dissolution – Ontario

Once the dissolution has been completed, please ensure to notify your bank, clients, suppliers and Revenue Canada.

To dissolve a Federal or Canada Incorporation

If you would like to dissolve your Federally Incorporated company, it is an easier process than filing with Ontario. You can simply fill in our online application to dissolve the corporation. A consent from Revenue Canada is not required.

Dissolve Your Federal Incorporation

Once the dissolution has been completed, please ensure to notify your bank, clients, suppliers and Revenue Canada.

If you wish to dissolve or cancel your business in a different Province or Territory, we may be able to assist. To obtain a quote call our office directly at 1-800-280-1913 or 1-416-599-9009 or message us to speak with one of our helpful agents.

If you have any questions about how you can file a cancellation or dissolution, you can contact the Ontario Business Central team. We offer same day cancellation for Master Business Licences and 24-hour preparation for Articles of Dissolution.

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Toll-Free: 1-877-306-9458
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Fax: 1-866-294-4363
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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.