Should I Cancel My Business?
Originally Published on August 10, 2017
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from clients on whether they should cancel their Master Business Licence or Incorporated company if the business is no longer active.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 it 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 cancellation 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 If he had cancelled his Sole Proprietorship and notified Revenue Canada that the business was no longer active, it would have saved him the time and costs to prove the business was no longer operational.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, you must file Ontario Articles of Dissolution. This is a bit more complicated than canceling a registered business however the process is similar in many aspects.
You will need to provide the details of the corporation including corporate name, corporate number and date of incorporation. As long as you have the name of the corporation we can assist you in retrieving the corporate number and date of incorporation if you do not have these details readily available. Name and address of a current director along with the officer position held, if the business has or has not commenced business and if property has been distributed if owned.
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.
inquiries@ontariobusinesscentral.ca
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.
