If you made the tough decision to close down your business, you have to ensure you do so properly as there are requirements that have to be met.
If you are locked into a lease, you have to find out the penalties for breaking it or find someone to potentially take over. You also have to review any agreements that you might have in place as well to ensure you are not in breach.
If you were running your business as a sole proprietor or as a partner, you will have to cancel your business registration. In Ontario, you are able to do so online. If you are dissolving a corporation voluntarily, you would need a special resolution passed at a meeting of your shareholders. The appropriate articles of dissolution must be submitted with a letter consenting to the dissolution. The letter of consent is obtained from the Minister of Finance and must be submitted within 60 days after the consent is given. If your company has not carried on business or issued shares, the form is different and must be sighed by all of the incorporators or their personal representatives.
If you were an employer, you have to close your payroll accounts along with additional benefits you were paying such as CPP, EI, and income tax deductions. You must do so within 7 days of your last day of business. You also have to confirm you do right by your employees and review the law when it comes to severance pay and notice pay.
Your GST/HST accounts have to be closed as well and any outstanding amounts must be paid. Your final tax return must be submitted to the CRA with a copy of the articles of dissolution. All your outstanding tax returns must be filed as well and you might consider getting a clearance certificate before the dissolution.
Once all the debts are settled, you would distribute the remaining assets to shareholders. This is where having an accurate Minute Book is very important.
After the dissolution, the company records have to be retained for at least 6 years.
Closing down your business needs to be carefully planned out and it’s important to seek the advice of a professional lawyer. Your lawyer can make sure you don’t miss anything and guide you through the process.
At Eshel Law Firm, we have the expertise and experience to help you make informed choices when it comes to Business Law. We are happy to provide you with a consultation and answer any questions you might have.
Contact us at: [email protected] or visit our website to make an appointment: www.eshellaw.ca.