Starting an economic activity through a company registered in Canada means making profits which must be reflected in the company’s financial documents. Based on these financial documents, a Canadian company must file annual returns in accordance with the local legislation.
Below, our company formation agents in Canada explain the annual return requirements for companies registered in this country. You can rely on us if you want to open a company in Canada, but also if you need accounting services related to the filing of annual returns.
What are the Canadian companies which need to submit annual returns?
According to the Company Law, all small, medium-sized and large companies registered at a federal, territorial or provincial level are required to prepare and file annual returns. The filing period depends on the financial year of a company, however, with the help of our accountants in Canada, the preparation and filing of such documents can become quite easy.
It is important to understand that the annual return of a Canadian company is not the same as the tax return. Also, extra-provincial corporations operating in Canada are subject to certain annual filing requirements.
Our local agents in Canada can offer more information on the regulations related to filing annual returns for companies registered in Canada.
Requirements related to filing annual returns for Canadian companies
In order to comply with the regulations providing to the filing of annual returns, Canadian companies must first respect a few steps prior to the actual filing. These steps imply:
- for the company to hold a general annual meeting of the shareholders in order to approve the annual returns;
- in case of small companies with one or a few shareholders, a written statement can be issued for the approval of the returns (the statement will exempt them from the meeting);
- an auditor’s report is also necessary before the annual returns are filed with the tax office;
- the filing deadline is no later than 60 days after the anniversary of the corporation (except for companies in their first year of activity).
The annual returns must be filed with the tax office in which the Canadian company is registered.
Our Canadian company formation advisors can offer more information on the preparations related to filing annual returns for local companies.
Options for filing annual returns in Canada
There are two options available for companies registered in Canada to file their annual returns. The first one is the online procedure, while the second one is by post. No matter the choice, the officer who was registered as a representative company with the Trade Register must file the annual returns.
In the case of extra-provincial corporations, the registered agent for services can fulfill that task.
Exceptions for Canadian companies in terms of annual filing requirements
It is good to know that there are also a few exceptions for Canadian companies which do not require to file annual returns. These are known as inactive companies, a status which refers to companies which have been dissolved, which have not registered any economic activity for the year the annual return is due, and for companies which have undergone amalgamation (mergers, acquisitions and takeovers).
The exception applies only for the year in which the Canadian company was inactive.
Our agents can help you set up a business in Canada and can explain the annual filing requirements in order for you to not have difficulties when the time for filing them comes.
Special requirements for extra-provincial corporations in Canada
When it comes to extra-territorial and extra-provincial corporations in Canada, it should be noted that if these operate in more than one territory, respectively Canadian province, they will be required to file separate annual returns in each territory/province.
We offer personalized accounting services for local and extra-provincial companies operating in Canada. We also offer registered agent services which can be of real help when companies in need of registered office services which need to file these returns, as Corporations Canada will send notifications to each company on this address.
Foreign investments in Canada
Canada is a very important foreign investment destination, considering that:
- it was the 11th largest Foreign Direct Investment (FDI) recipient in the world in 2018, according to UNCTAD‘s 2019 World Investment Report;
- the country attracted 39.6 billion USD in FDI in 2018;
- in the second quarter of 2019, Canada attracted 21,668 million CAD in FDI;
- Canada ranks 22nd in the World Bank’s 2019 Doing Business Report.
For assistance in filing annual returns for Canadian companies, please contact us.