Business corporations are required to file annual returns, which serve as confirmation of the corporation's active status. However, the process of filing an annual return, the consequences of non-compliance, and the content of the form vary depending on the corporation’s governing statute.

For this article, we focused on corporations incorporated under the Canada Business Corporations Act ("CBCA") and corporations incorporated or conducting business in Ontario.

Legal Framework

• Ontario Corporations: Corporations incorporated in Ontario or conducting business within the province must file annual returns as per section 3.1 of the Corporations Information Act, R.S.O. 1990, c. C.39 (the "CIA").
• Federal Corporations: Corporations incorporated under the CBCA are required to file annual returns pursuant to section 263 of the CBCA.

Consequences of Not Filing Annual Returns

Failure to file an annual return can lead to serious consequences, such as fines imposed on the corporation and its directors, as well as the dissolution of the corporation.

Under the CBCA, Section 212(1) empowers Corporations Canada to dissolve a corporation that fails to file its annual return for a year. Similarly under the Business Corporations Act, R.S.O. 1990, c. B.16 (OBCA), Section 241 allows for the dissolution of corporations that fail to file their annual returns. Corporations subject to the CIA and their directors may face fines of up to $2000 for failure to file the required annual return.

Completing Annual Returns

• For corporations governed by the CIA: The annual return is filed through the Ontario Business Registry (OBR). If this is the first time accessing the corporation’s profile on the OBR, the corporation’s company key will be required.
• For corporations governed by the CBCA: Annual returns can be filed through the Online Filing Centre - Corporations Canada. Again, the corporation key is needed for first-time access.

The information required for filing an annual return varies based on the governing statute.

• The following information is required for filing an annual return under the CIA:
  • Year of the return
  • Any changes to the registered address
  • Any changes in directors (new appointments or cessations)
  • Any changes in officers (new appointments or cessations)
• The following information is required under the CBCA:
  • The year of the return.
  • The date of the last annual shareholders’ meeting.
  • The type of corporation (distributing or non-distributing).
  • For non-distributing corporations, the number of shareholders.

When to File Annual Returns

• Corporations incorporated under the CBCA must file their annual returns within 60 days of their incorporation anniversary date.
• For those governed by the CIA, the annual return should be filed during the period when the corporation is required to file its tax return for the last completed taxation year.

Is An Annual Return the Same as a Tax Return?

No, an annual return is different from a tax return. A tax return is a document filed with tax authorities that details the taxpayer’s income, expenses, and any applicable deductions or credits to determine the income tax payable. In Canada, income tax returns are filed with the Canada Revenue Agency (CRA), which handles income tax returns (Revenu Québec handles those for Quebec).

On the other hand, annual returns are completely separate from an income tax return, do not relate to a corporation’s tax obligations and are not filed with the CRA.

Key Points

• Filing annual returns is a legal obligation for all business corporations.
• Non-compliance can have significant consequences, including fines and potential dissolution.
• Understanding the filing requirements and deadlines for your specific corporation is crucial.
• Annual returns are not the same as an income tax return.

At Cozien Law, we represent corporations to ensure compliance with applicable laws, including the filing of annual returns. Feel free to reach out to us if you have any questions regarding a corporation, file your annual returns or comply with regulatory requirements. Our telephone number is 613-558-5363, or you can email us at info@cozienlaw.com.

[This post does not constitute legal advice or opinion; please reach out if you have any questions]