Canceling a registered business in Ontario can be an intimidating process when you have no idea where to start. Be it that you are closing down a sole proprietorship, a partnership, or a corporation, knowing the steps to take will get you through this very smoothly and hassle-free. This blog is going to help you figure out how to cancel a business and all the steps you are going to need to make in properly dissolving your registered business in Ontario.
There could be a number of reasons why a business owner may want to close their business or dissolve it in Ontario. Among them could be:
Whatever the reason, closing a business is not just walking away from the business. Due legal processes followed will ensure you don’t have to face any hassles in the near future.
Before getting into the procedure, it is necessary to understand the kind of business structure you registered under as that will determine how you need to proceed with the cancellation.
It is relatively easy to cancel a sole proprietorship or partnership. As these types of businesses are not separate legal entities from the owner(s), in order to cancel them, it usually involves little paperwork. However, you are required to cancel any licenses and permits and notify the concerned body.
Dissolution of a corporation is more complex than that of a partnership. It requires several steps such as filing the articles of dissolution and making sure tax and financial obligations are paid.
To cancel a registered business, one has to officially notify the government of losing interest in operating under the registered business name. For sole proprietorships and partnerships, this must be done by filing a “Cancellation of Business Name” form with the Ontario government. For corporations, they don’t need to separately cancel their business name; the process of dissolution takes care of it. Forms can be completed online or mailed to Service Ontario. No fee is charged for forms of sole proprietorships and partnerships.
Once you cancel your registered business name, it is essential to notify any customers, vendors, and other stakeholders that your business is no longer in operation.
Before you can totally close out a business, the first and most critical thing to do is to settle your debts or obligations, such as taxes, payroll, and any unpaid invoices. It might cause legal issues or affect your personal credit, especially if you are a sole proprietor or in a partnership.
For corporations, it essentially refers to taking care of the final tax returns to ensure that nothing is left outstanding with the Canada Revenue Agency (CRA). The business has to file:
Ensure that all tax liabilities are taken care of before a dissolution is filed because the CRA will not accept your request for dissolution if any taxes remain unpaid.
The kind of business an owner is involved in determines the kind of license you are required to obtain. For example, if you operate a restaurant, you may have acquired a food service license. If you are a contractor, you probably hold a building or trade license. All of these must be officially canceled with either your local municipality or the Ontario government, depending on the license type.
If you had any CRA accounts for taxes, payroll, or HST, close them formally. You can do so through the My Business Account service of the CRA, or you can contact the CRA. Be sure to file a final return for each account type before closing it.
If your registered business is a corporation, you must file articles of dissolution in order to formally dissolve your registered business entity. You do so by filing a form called “Articles of Dissolution” with the Ontario Ministry of Government and Consumer Services.
After you file, the government will process your filing, and your corporation will be dissolved.
After you have filed all the paperwork and canceled your licenses and accounts, it’s time to communicate to any other stakeholders that you are closing your business. This includes the following:
Also ensure that you’ve made all the final payments or cleared out your debt with them to avoid any future disputes. In addition, it is important to close all business bank accounts and cancel any business-related credit cards or loans to avoid unnecessary fees or charges post-dissolution.
Failing to do so is likely to complicate some of the following issues associated with closing a business in Ontario:
This will prevent all that and ensure as you move to the next venture, you have no stress at all.
Although it may sound too much for a process, the cancellation of a business is quite an overwhelming thing to think of. Ontario Incorporation (ontario-business.ca) will provide comprehensive service in business cancellation in Ontario quickly and in the shortest period possible. From the filing of required forms to assisting with final tax returns, our experts shall be with you at each stage.
Properly canceling an Ontario-registered business, whereby all obligations are satisfied, should be planned and executed properly. Business name registration can also be canceled, or articles of dissolution for a corporation can be submitted, in this way avoiding future complications. In this way, you may be able to get your financial and legal obligations settled and close down your business moving on to other opportunities. If you need a hand while closing your business, Ontario Incorporation has just the thing for you in an easy process. Contact us today to learn about how we assist in closing businesses and starting afresh.
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