Your annual return notifies Corporations Canada (in the case of a federal corporation) or Alberta Corporate Registries (in the case of an Alberta corporation) that your company is still active and details any changes you’ve made, such as changes to the registered address or board of directors. Federal or provincial, big or small, every corporation is legally obligated to file. If you do not file the annual return, your corporation may be dissolved.
Corporations are required by law to hold annual meetings of the shareholders (or pass written resolutions instead), and to keep the corporation’s records up to date. Resolutions are written statements that record corporate actions, such as approval of financial statements, the election of directors, the appointment of officers, and more. For corporations with a smaller number of shareholders, it may be more practical to prepare a written resolution rather than to hold a formal meeting. Where meetings are not necessary, Lawnch can assist in preparing annual resolutions.
Every corporation must file an annual return with Corporations Canada (in the case of a federal corporation) or Alberta Corporate Registries (in the case of an Alberta corporation) every year. By filing an annual return, you will be confirming that your corporation’s legal status is “active” (that it is not dissolved, discontinued or amalgamated with another corporation). Your corporation will automatically be dissolved if the corporation’s annual return is not filed within the designated filing period. Dissolution can have serious repercussions, including not having the legal capacity to conduct business.
To be clear, the annual return is not your income tax return. The annual return is a corporate law requirement. It is completely separate from any filing obligations you may have with the Canada Revenue Agency (CRA).
In addition to the filling of an annual return, all corporations must hold at least one annual meeting of shareholders every year. At this meeting, the shareholders are required to consider the corporation’s financial statements, the election of directors (if necessary) and auditor matters (or dispensing with the auditor).
For corporations with a smaller number of shareholders, it may be more practical to prepare a written resolution rather than to hold a formal meeting. A written resolution is a written record of decisions made that is signed by all of the shareholders entitled to vote.
Lawnch is here to assist you in ensuring that your corporation’s annual corporate maintenance needs are met.