It is the time of year again when we start sending out our corporate maintenance reminder letters. And as such, I thought it would be appropriate to cover that issue here.
Various provincial and federal statutes require that corporations meet basic requirements in terms of annual record keeping and reporting.
In addition to the obvious requirement to report the corporation’s income for the purposes of taxation (which we will not discuss here), there are two major categories of annual maintenance that every corporation must concern itself with.
The first is the duty to maintain internal records of the annual meeting of the shareholders of the corporation.
While neither the Ontario Business Corporations Act or the Canada Business Corporations Act specify the extent of detail that is required, experience tells us that the minutes should record attendance, the election of accountants and auditors (if required by the Acts), and the election of directors and officers. As well, any resolutions passed at such meetings must be kept by the corporation.
The second duty is to keep the relevant governing body apprised of your basic corporation information on an annual basis – generally this relates to the names and address of current directors and the address of the corporation.
In the case of provincially incorporated entities, the Corporations Information Act requires that you submit a CIA return, along with your annual income tax return.
For federal corporations, however, a separate corporate annual return must be submitted to Corporations Canada.
Penalties for failure to adhere to the annual requirements range from fines to having the corporation cancelled. It’s something that should be taken seriously by all directors.
If you have any questions about this, or any other compliance matter, do not hesitate to contact me.