Closing your business is not an easy task: whether motivated by financial, professional or personal reasons, this decision can have many consequences if not completed correctly. Compliance with official administrative procedures is essential in order to disclose the cessation of your business activities to concerned governmental institutions.
Follow these tips to help guide you during the complex undertaking of closing your business!
Reporting and justifying the closing of your business
In order to officially formalize your situation, you will be required to report the closure of your business and justify the reasons for it. Do note however that the procedures are not the same if you are closing your business the case of dissolution or liquidation.
You must first declare that you will be closing your business to the Quebec Enterprise Register (where it was previously registered). This establishment distinguishes the 2 cases of closure mentioned above so as to be better informed on the conditions of your closure and to conclude your collaboration by issuing any necessary final costs.
In the case of dissolution
You will have to complete a declaration of dissolution; this declaration explains that your company is dissolving following the consent of the shareholders or the sole decision of the directors (for example, by an agreement of the board of directors) or of the only shareholder in the company.
In the case of liquidation
In the case of liquidation, you are required to file a notice of liquidation so as to justify the procedures you will undertake to fulfill your last obligations and to dispose of your business property. Once these steps have been completed, you will need to issue a notice of closure of liquidation to the Quebec Enterprise Register.
In the case of bankruptcy
This case is quite complex and will be treated differently if your business is a traditional business or if you are an individual for whom the bankruptcy will be personal and will not concern the company itself.
T2inc experts are skilled in helping you determine the exact status of your company so that you can easily file for the closing of your business.
Besides the obligation to inform government authorities, it is also important to inform your customers, your collaborators, your suppliers, etc. of your closing. Try to anticipate your financial situation with your bank in order to facilitate the best way to cease your business activities and plan for any financial consequences.
Closing your business: Taxes to be paid
As a business, you have had to pay provincial taxes depending on your business sector, as well as separate federal taxes. Your tax-based duties towards these establishments are of course annulled the end your company’s life, as long as you make sure to correctly file for closure.
Taxes for Revenu Canada and Revenu Quebec
Once you have officially reported your closure situation with these two governmental institutions (your last assessment notices have been processed, and there are no delays or debts in progress), you can finally close your business with Revenue Canada and Revenu Quebec.
You will have to fill out separate forms in order to close one or more of your individual tax numbers. Do note however that you should not complete these forms if your business has been or will be merged; if this is the case, your situation is different from an actual business closure.
During your lifetime, your business has paid taxes to the state: you must stop paying them now that you are going to close your business. You must therefore cancel your registration in the GST/QST tax Register as well as any other consumer tax registers that you have previously applied to.
Once again, there are specific cases depending on the size and nature of your business activity, so please do not hesitate to contact Revenu Quebec for more information!
Closing your business requires a lot of attention and precision in order to not forget any establishment and to not drag debts or administrative tasks on for too long. If you would like to seek the help of a professional, don’t hesitate to contact us: our expertise in corporate taxation in Montreal allows us to help business leaders during the closure of their enterprises.