Annual Compliance for Canadian Federal Corporations: 2024 Requirements
Every federal corporation in Canada has annual maintenance requirements. Our guide covers the following compliance requirements:
- Corporate Minute Book Filings
- Corporations Canada Annual Return
- Extraprovincial Registration
It's crucial to emphasize that this guide specifically concentrates on the legal compliance requirements essential for maintaining the active status of your corporation. While companies also need to address annual tax filings and regularly remit payroll and sales taxes, our guide is dedicated to navigating specific legal obligations.
Maintaining Your Corporation's Minute Book: Director Elections
Canadian federal corporations maintain a minute book which contains critical legal records including the Articles of Incorporation, By-Laws, Minutes of Meetings, and the Register of Directors. Minute books can be a physical binder or a digital folder. Directors are allowed to sign minute book filings online.
Each year, several documents need to be added to the minute book:
Incomplete or inaccurate minute book records pose a risk of "misrepresentation" under section 256 of the Business Corporations Act. Not updating the minute book could result in fines of up to $2,000 or imprisonment of the corporation's directors for up to a year. Additionally, disorganized or inaccurate records may make the corporation susceptible to a tax audit by the Canada Revenue Agency or the revocation of the corporate charter.
Your directors must consent again to serving even if they were first elected to the board years ago.
Fortunately, LegalDeeds offers affordable solutions to write your minute book. Founded in 1999, LegalDeeds offers minute book documents for only $5 each. You will need one Annual Shareholder Resolutions per year, one Annual Director Resolutions per director, and one
Consent to Act as Director per director. The documents are customized for your corporation's needs, using rules written by lawyers, then emailed to you within seconds.
Annual Filings with Corporations Canada
Another important annual task is filing with Corporations Canada. This filing, which costs $12 on Corporations Canada's official website, needs to be made within 60 days following the corporation's anniversary date. It provides an updated record of your corporation's directors, shareholders, and operational status. Failing this could result in involuntary dissolution of your corporation, so this is a step you cannot afford to miss.
Extraprovincial Registration
Federal corporations typically register in the province they operate in when they incorporate. Some provinces require you to submit annual extraprovincial returns online. For example, the British Columbia Extraprovincial Registration is available online for $40. Likewise, Service Ontario accepts annual returns for extraprovincial corporations. If you are unsure whether you need to submit an extraprovincial registration, you should contact the lawyer who incorporated your corporation.
Annual Shareholders Meeting
Small businesses typically do not need to host a shareholders meeting. The Annual Shareholder Resolutions can be signed in-lieu of a physical meeting. This flexibility exists because small businesses usually only have a handful of owners so there is no information to share with the shareholders. In contrast, corporations with investors should consider hosting a shareholders meeting.