Once your corporation is incorporated in Ontario, there are several post-incorporation compliance obligations that you must fulfill in order to maintain your corporation’s good standing with the government and avoid any penalties or fines. Failure to comply with these obligations could result in the corporation being dissolved by the government, and in some cases, personal liability for directors and officers. In this blog post, we will discuss the annual filings, reports, and obligations that Ontario corporations must fulfill.
Ontario corporations must file an Annual Return with the Ministry of Government and Consumer Services (MGCS) every year. The Annual Return provides the government with updated information about the corporation, such as the names and addresses of directors and officers, the registered office address, and the share structure of the corporation. The Annual Return must be filed within six months of the corporation’s fiscal year-end.
Ontario corporations must prepare annual financial statements in accordance with generally accepted accounting principles (GAAP). These financial statements must be approved by the board of directors and presented to the shareholders at the annual general meeting. In some cases, the corporation may be required to have the financial statements audited or reviewed by an external accountant.
Ontario corporations are required to hold an annual general meeting (AGM) of shareholders every year. The AGM is an opportunity for shareholders to elect directors, appoint auditors, and receive financial statements. The AGM must be held within six months of the corporation’s fiscal year-end.
Ontario corporations are also required to hold regular meetings of the board of directors. These meetings are an opportunity for the directors to discuss and make decisions about the corporation’s business affairs. Minutes of these meetings must be kept and maintained in the corporation’s records.
Ontario corporations must keep accurate and up-to-date corporate records, including:
- Articles of Incorporation and any amendments
- By-laws and any amendments
- Minutes of shareholder and director meetings
- Shareholders’ register and share certificates
- Register of directors and officers
- Register of transfers of securities
The corporate records must be kept at the corporation’s registered office or another location in Ontario that is designated by the corporation.
In addition to the above obligations, Ontario corporations may be subject to other requirements depending on their business activities. For example, corporations that have employees may be required to register for payroll deductions and pay Employment Insurance (EI) premiums and Canada Pension Plan (CPP) contributions. Corporations that collect and remit sales tax may also be required to register for the Harmonized Sales Tax (HST).
Penalties for Non-Compliance
Failure to comply with the above obligations can result in penalties and fines. The government may also take steps to dissolve the corporation. Directors and officers can be held personally liable for any debts or obligations incurred by the corporation while it was not in compliance with its obligations.
Post-incorporation compliance is essential for maintaining the good standing of your Ontario corporation. Failing to comply with the annual filings, reports, and obligations can result in penalties, fines, and even the dissolution of the corporation. It is important to stay up-to-date with these obligations and ensure that they are fulfilled in a timely and accurate manner. If you have any questions or need assistance with post-incorporation compliance for your Ontario corporation, contact a corporate lawyer for guidance.