In the business world, sometimes you have to make difficult decisions, and one of those decisions is to deregister your company. Whether it's because of a business downturn, a change of ownership, or other reasons, deregistering your company may be a necessary step. In this blog, we will explain in detail what it means to deregister your Canadian company, what documents are required, the process, and possible costs.

What is company deregistration?

Deregistration is the process of removing a company from the commercial register. This means that the company will no longer exist, conduct business activities, or meet relevant tax and legal obligations. After deregistration, the company will no longer be a legal entity and will no longer be liable for debts, taxes, or other legal liabilities.

What is required to deregister a company?

In Canada, there are some necessary steps and documents required to deregister a company. Here are some materials and information you may need:

1. Company Resolution : You will need a resolution from the board of directors or shareholders meeting to formally decide to deregister the company.
2. Corporate documents : You’ll need your company’s registration documents, articles of association, and list of shareholders.
3. Financial Statements : You may be required to submit a final financial statement to ensure there are no outstanding debts or other financial obligations.
4. Tax documents : You need to make sure your company has met all of its tax obligations, including filing returns with the Canada Revenue Agency.
5. Company Accounts : You will need to close your company’s bank accounts and resolve any issues with the bank.
6. Permits and Licenses : If your business holds special permits or licenses, you will need to cancel those.
7. Company Number : You will need your company's unique identification number in order to deregister.

Company deregistration process

The deregistration process may vary depending on the type of company and province, but generally includes the following steps:

1. Resolution of the board of directors or shareholders’ meeting : The company’s board of directors or shareholders’ meeting needs to pass a formal resolution agreeing to deregister the company.
2. Submit a deregistration application : Depending on your province and company type, you will need to submit a deregistration application to the relevant government agency. Typically, this is done at the business registration agency in the province.
3. Liquidation of Company Assets : The company's assets are sold or distributed to shareholders in order to liquidate the company's assets.
4. Take care of your taxes : Submit all necessary tax documents to the Canada Revenue Agency and make sure you pay all the required taxes.
5. Waiting for approval : Waiting for the relevant government agency to approve your cancellation application.
6. Closing of bank accounts : Closing of the company’s bank accounts and ensuring that all bank-related matters are settled.

How much does it cost to cancel a company?

The fees for deregistration vary by company type, province, and circumstances. Generally, you will need to pay the following fees:

1. Government fees : You will need to pay cancellation fees to the relevant government agencies. These fees vary by province.
2. Legal fees : If you hire a lawyer or company secretarial service to assist you with the deregistration process, you will also need to pay their fees.
3. Accounting fees : If financial clearance and reporting are required, you may need to pay an accountant’s fees.

Please note that the costs of deregistering a company may vary depending on your company’s unique circumstances, so it is recommended to consult a professional to obtain an accurate cost estimate before beginning the process.

In summary, deregistration is a complex process involving multiple steps and documents. Before starting the deregistration process, it is recommended to consult with us to ensure that everything is legal and goes smoothly. Although there are some fees associated with deregistration, deregistration can help you free yourself from the legal and financial responsibilities of your company, allowing you to move on to new business adventures.