Closing a business is neither a pleasant nor an easy thing to deal with. Whether for financial, professional or personal reasons, this decision entails numerous consequences on several levels. It is essential to comply with administrative procedures to inform the relevant institutions of the cessation of your activities.
In order to regularize your situation officially, you need to inform the authorities of the closure of your company and the reason for this decision. Procedures differ depending on whether you are closing down, dissolving, going bankrupt or being wound up.
You must first declare the closure of your company to the Companies Registry where it was previously registered. This register distinguishes between the various cases mentioned above. In order to inform the Registry more precisely about the conditions of closure, and to finalize your collaboration by paying the necessary final fees, here are the administrative formalities to be completed.
If your company decides to cease operations, you must immediately request deregistration from the GST and QST files. In addition, you must cancel all other commodity taxes for which you are registered. If you fail to do so, your company may be liable for charges even though it is no longer generating revenue.
Depending on the sector of activity, your company must also inform the relevant authorities using an update form, or simply by writing a letter containing the new information.
To be adopted, dissolution must be approved by at least two-thirds of the shareholders or by a decision of the directors (e.g., by agreement of the Board of Directors) or of the company's sole shareholder. Next, the request must be submitted to the Registre des Entreprises by completing the declaration of intent to dissolve and request for dissolution form.
This particular case requires the production of a notice of liquidation and a notice of liquidation closure. These administrative documents serve to justify the procedures you are undertaking to fulfill your final obligations and liquidate your assets. The notice of liquidation can be sent directly online via a service offered by the ARC agency. It is strongly recommended to ensure that the company in liquidation is still registered with the Registre des Entreprises at the time of this declaration. Winding up a company involves more than just selling it.
This is a rather complex case, and will be treated differently depending on whether it concerns a legal entity or a sole proprietorship. In the case of a sole proprietorship, there is no distinction between personal and professional assets. Thus, the bankruptcy of a sole proprietorship automatically entails personal bankruptcy.
It is highly advisable to call on the services of accountants to help you close your bankrupt business.
In addition to informing official contacts of your company's bankruptcy, it is also important to inform your business partners, such as customers, employees and suppliers.
And don't forget the other usual formalities, such as changes of status with the banks. This will facilitate the cessation of your activities and avoid unpleasant financial surprises.
As a Canadian company, you must pay taxes based on your activity, both to your province and to Canada. Your tax obligations to these institutions end as soon as you close your business. To do this, you need to keep them properly informed.
As far as taxes are concerned, you must close your accounts with Revenue Canada and Revenue Québec once you have regularized your situation with these two organizations (i.e., your last notices of assessment have been processed and you have no outstanding debts).
To do this, you'll need to fill in separate forms to close your tax IDs with each institution. However, please do not fill in these forms if your company has been or will be merged, as this is different from a true cessation of activity.
The formalities for closing a business with Revenu Québec may vary depending on the reasons for ceasing operations. Find out more on the Internet, or ask a qualified tax specialist to assist you.
As far as taxes are concerned, during the course of your business, you paid taxes to the state. Therefore, it's important to stop payments now that your business is closed. As previously mentioned, you need to deregister from the GST and QST files, as well as any other taxes to which you were subject during the course of your business.
Once again, depending on your particular circumstances and the nature and scope of your activity, it is advisable to contact Revenu Québec or a tax expert.
Because of the rigor and organization required to carry out the process properly, we recommend that you call on a quality accountant to help you.
So don't hesitate to contact us if you'd like to find an accountant adapted to your entrepreneurial reality to support you in this process. https://www.bankeo.ca/
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