Before Closing Down a Business in Ontario: Everything You Need to Know
Closing down a business may mean you’re retiring or starting another venture. Here’s how to do it properly.
Running a business successfully, especially in Ontario, is not a walk in the park. Post-COVID concerns include debt, digital disruption, supply-chain snarls, labour crunches, and the inability to go past the fourth pandemic wave.
Even as the government and other regulators try to salvage the situation, especially for small and mid-sized businesses, many business owners in Ontario continue to struggle. While the vaccines and passport rules set, targeted wage extensions, and rent subsidies are trying to create a favourable environment for investors, they might have come too late. For some, the only option is to close down entirely.
However, to close down a business in Ontario, you need to keep some factors in mind to ensure that you adhere to the set rules and regulations and that the process is seamless. Here, we provide you with the finer details of going about it.
What You Need to Close Down Your Business in Ontario
The process of closing down a business in Ontario is almost similar to setting it up. Cancellation of a Master Business Licence requires that you provide documents with information such as:
- The name of your business
- The activities of your business
- The type of your business registration
- Details of the corporate name, head office address of the corporation your business operates under, and Ontario Corporate Number (relevant for Corporation business licences only)
- The mailing address of your business
- The BIN number
The Process of Closing Down Your Business
Closing down a business in Ontario depends on your type of business and the jurisdiction of incorporation. For instance, if your company is incorporated, you must adhere to the Articles of Dissolution under the Business Corporations Act. You will also need:
To provide information of whether your corporation issued shares and, if so, provide proof that the shareholders authorised the dissolution
To provide information about your financial status. You must have no pending debts, liabilities, or obligations
As opposed to the past where corporations were required to get a Consent to Dissolve Letter from the Canada Revenue Agency, which was a long and tedious process, the Consent to Dissolve now makes up the Ontario Articles of Dissolution filing.
Note that to apply for dissolution of your business directly from the Ontario government requires you to provide your corporation’s Company Key.
Should You Close or Sell Your Business?
It is not easy to close a business that you have struggled with, especially if it’s still making some profits. Fortunately, E&E Professional Accountants can help you make the right decision. We account for small businesses, offering unique insights and peace of mind.
If you are at a crossroads, not knowing whether to sell or close your business, contact us to learn how we can help you.
- Best Practices When Forming a Business Partnership in Ontario - April 26, 2022
- Before Closing Down a Business in Ontario: Everything You Need to Know - April 26, 2022
- Self-Employed VS Personal Services Corporation — Definition & Tax Implications - February 16, 2022