Originally Posted on February 20th, 2017
Business owners may choose to close their businesses for a variety of reasons. Changes in the marketplace, new business opportunities, and other factors cause business owners to choose to cancel and dissolve their companies.
You might be wondering if the cancellation and dissolution of a business are two different things.
Understanding the distinction between the two and knowing what’s required to complete these important steps will help you through the process of closing your business.
Canceling your business – Master Business License/Business Registration
The cancellation of a business (Master Business License or Business Registration) consists of ending the rights and privileges that it holds. Businesses must file their cancellation with the Provincial government in order to complete the process.
You must submit all of the information that was provided when the business was first registered. This includes the company’s Business Identification Number (BIN), name, and type of business along with other information.
We help businesses register their cancellation properly in order to expedite the process and prevent any unwanted issues.
The cancellation of a business occurs for different reasons. Companies that want to change their name and structure or are no longer operating should complete the cancellation process.
This allows you to terminate future liabilities and establish an end date for your business. Once the cancellation has been completed, provide the cancellation to your financial institution and any tax account branches to close existing accounts.
Business dissolution – Incorporation
Business dissolution occurs when a company legally terminates its existence. Companies looking to dissolve their business must consider several factors. The proper forms must be filed, and you must demonstrate your authority in registering the dissolution.
If incorporated in Ontario, as of October 2021, the dissolution and tax verification is completed between government agencies. Previously, you had to contact the Minister of Finance directly to update your corporate tax return prior to completing Articles of Dissolution. That is no longer required making the dissolution of an Ontario corporation much easier. If there are debts and assets of the corporation, these still require resolution before completing the dissolution process via Articles of Dissolution.
If your corporation was incorporated federally with Corporations Canada, it can also be easily dissolved through our online platform. We prepare the Articles of Dissolution according to your instructions and provide the documents to you in ‘draft’ for your review prior to filing with the federal government. If your corporation has operated within the Province of Ontario, you can also cease operations with us simultaneously. The federal Articles of Dissolution are prepared and filed on a same day basis with your authorization and are typically returned same day or the following business morning.
Other considerations when canceling and dissolving your business
Other considerations include contacting the Canada Revenue Agency (CRA) and planning for any future succession. Businesses must complete final tax returns, and outstanding debts must be resolved. Payroll, GST/HST, and other accounts must be closed through the CRA in order to close your business.
Although the process may be complex, we provide services that help you close your business and ensure that there are no remaining liabilities. This makes the process easier and reduces the amount of resources required to cancel and dissolve your business.