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Annual & Ongoing Obligations

Navigating the annual and ongoing obligations of a corporation involves a range of critical tasks. This article provides essential insights into fulfilling these obligations, covering internal record-keeping, financial reporting, and interactions with regulatory bodies such as Corporations Canada and the Canada Revenue Agency. Gain a clear understanding of the requirements that uphold your corporation's compliance with legal and financial standards.

Internal Obligations​

There are a set of items that must be completed by the directors and shareholders of a corporation on an annual basis. These typically don't need to be reported externally and remain internal to the corporation.

Corporate Minute Book​

See the section on maintaining corporate records.

Annual Board of Directors Obligations​

The board is required to present financial statements to the shareholders not later than 6 months after the end of the fiscal year. Effectively this means the board must meet at a minimum of once per year.

Annual financial statements

155 (1) The directors of a corporation shall place before the shareholders at every annual meeting

     (a) prescribed comparative financial statements that conform to any prescribed requirements and relate separately to

          (i) the period that began on the date the corporation came into existence and ended not more than six months before the annual meeting or, if the corporation has completed a financial year, the period that began immediately after the end of the last completed financial year and ended not more than six months before the annual meeting, and

          (ii) the immediately preceding financial year;

     (b) the report of the auditor, if any; and

     (c) any further information respecting the financial position of the corporation and the results of its operations required by the articles, the by-laws or any unanimous shareholder agreement.

Canada Business Corporations Act

See further obligations for the board of directors

Annual Shareholders Meeting & Obligations​

Shareholders must meet, not greater than 18 months from the previous meeting and not more than 6 months from fiscal year end. Effectively this means that shareholders must meet annually.

At a minimum at the annual meeting must cover the following:

  • consideration of the financial statements
  • appointment of an auditor (or a resolution of all shareholders not to appoint an auditor)
  • election of directors.

A written resolution can be issued by the shareholders in lieu of the meeting, this is common in smaller corporations.

Corporations Canada​

Corporations Canada is the business registry that all federal corporations are incorporated with.

Annual filings - Corporations Canada​

Each federal corporation must file an annual return with Corporations Canada. This is straightforward form to fill and submit. The annual return costs $12 and must be filed within 60 days following their incorporation, amalgamation or continuation anniversary date.

Notification of Changes​

If you change who is on your board of directors (or their address changes) or you change your corporate address, you must notify Corporations Canada of these changes. The easiest way to notify Corporations Canada is through the Online Filing Centre.

Provincial Business Registries - Annual filings - Extra-provincial registration​

Some extra-provincial registrations may require an annual filing and fee to be paid. But for example in Ontario, there is no requirement for a federal corporation that has completed an extra-provincial registration in Ontario to pay an annual fee or file an annual return with the Ontario Business Registry.

Canada Revenue Agency​

Annual T2 Income Tax​

It is important to note that filing an annual return with Corporations Canada is not the same as a tax return with the Canada Revenue Agency.

The Canada Revenue Agency specifies that all resident corporations must file a T2 Income Tax return annually.

Resident corporations

All corporations — including non-profit organizations, tax-exempt corporations, and inactive corporations — have to file a T2 return for every tax year, even if there is no tax payable. The only exceptions to this rule are tax-exempt Crown corporations, Hutterite colonies, and corporations that were registered charities throughout the year.

Canada Revenue Agency

Specific Program Accounts​

Corporations may register for additional program accounts with the Canada Revenue Agency such as goods and services/harmonized sales tax (GST/HST), payroll, import-export, registered charity or information returns. Depending on certain factors, reporting and tax remittance may need to be completed annually or more frequently.

Maintaining up to Date Information with the CRA​

If key corporate information changes, such as contact information, address, directors (including SIN), ownership, business name (including operating name), etc. Then this must be updated to the CRA. Information must first be registered with the relevant business registry, after which supporting documentation should be sent to the CRA.

Director's Social Insurance Number (SIN)​

If a director's SIN has not been previously provided to the CRA, it can be provided in one of the following ways:

  • a representative may use the "Submit documents" service in Represent a Client to send a request signed by the director to add their SIN to the corporation's account
  • a director can call Business Enquiries at 1-800-959-5525
  • a director (or a representative) can fax a request signed by the director to their tax centre (P.E.I., 1-833-724-7237 or Sudbury 1-855-276-1529)
  • a director (or a representative), can mail a request signed by the director to their tax centre

If a business changes it's legal name or operating name this must be updated with the CRA. See CRA page on how to change a business operating name.

Business Permits and Licences​

Depending on the type of business, the size and where it is located there may be additional permits or licenses required to operate. For example a medical device manufacturer may require specific approvals from Health Canada. A great resource in Canada is to check BizPaL, a government-run site for permit and licence information in Canada.

Fulfilling Obligations for Lasting Corporate Success​

In conclusion, staying on top of a corporation's annual and ongoing obligations is paramount for maintaining compliance and ensuring smooth operations. From internal record-keeping to financial reporting and regulatory filings, each component plays a crucial role in upholding legal and financial standards. By proactively addressing these obligations, corporations can establish a solid foundation for sustained success and avoid potential pitfalls down the road.

Why choose Ribbon​

To keep a corporation compliant is challenging. Ribbon gives entrepreneurs the tools to help them stay compliant. From setting up minute books, maintaining registers to annual filings, Ribbon let's Entrepreneurs focus on their business. Learn more about Ribbon.