Shutting down a corporation isn’t like closing a bank account. In Canada, your corporation legally exists — and its tax obligations keep running — until you file the proper final returns with the CRA and formally dissolve it with your province. Stop operating without filing, and the CRA will keep expecting returns, keep issuing penalties, and can hold directors personally liable.
We see this question regularly from Canadian business owners: “I need help with closing a small corporation company, final filing etc.” It’s more common than you’d think — and getting it wrong is expensive. Here’s the wind-up checklist.
1. File one last T2, marked “final”
Your corporation’s final T2 corporate tax return is due six months after the final year-end — and yes, you must file it even if the company earned nothing that year. Mark it as the final return so the CRA closes the file instead of chasing you for next year’s.
2. Close your GST/HST and payroll accounts
File final GST/HST returns and remit everything collected. If you had employees, close the payroll (RP) account and issue final T4 slips. This is the step people skip — and directors are personally liable for unremitted GST/HST and source deductions.
3. Clear shareholder loans before you distribute
Unpaid shareholder loans can be taxed as personal income in the shareholder’s hands. Settle or properly document them before distributing the remaining cash or assets — and record any deemed dispositions of capital property on the final return.
4. Dissolve with your province — last, not first
File articles of dissolution through your provincial registry (in Ontario, the Ontario Business Registry). Do this after the CRA accounts are closed, not before — dissolving with outstanding CRA balances creates far worse headaches.
5. Keep your records for six years
The CRA requires you to keep business records for six years after the end of the tax year they relate to — even after the corporation is gone.
Need help winding up?
Closing a corporation? TFB Tax & Bookkeeping handles final T2 filings and wind-up checklists for Canadian small businesses — T2 from $899. Call or WhatsApp FEIFEI at 437-879-6899, or visit taxfinbiz.com.
