How to Close Your Corporation in Canada: Step-by-Step Checklist

So you’ve decided to close your corporation. Maybe the business ran its course. Maybe you’re moving on to something new. Whatever the reason, shutting down a corporation in Canada isn’t as simple as just stopping operations. There’s a process, and if you skip steps, CRA will come looking for you years later.

I’ve had clients come to me who closed their business five years ago and never properly dissolved it. They’re still getting notices. They still owe filing fees. Don’t be that person.

Last updated: April 2026

Step 1: Wind Up Your Operations

Before you file anything, you need to wrap up the business side:

Collect your receivables. Chase down everyone who owes you money. Once the corporation is dissolved, collecting gets complicated.
Pay your vendors. Clear all outstanding payables. You don’t want creditors coming after you personally.
Liquidate assets and inventory. Sell equipment, clear out inventory, close out any remaining contracts.
Handle employees. Issue final paycheques, Records of Employment (ROEs), and T4 slips for all wages paid in the final year.
Distribute remaining assets to shareholders. Whatever’s left after debts are paid goes to the shareholders. This distribution has tax implications (more on that below).

Step 2: File Your Final Tax Returns

This is where people mess up the most. You need to file:

Final Corporate Tax Return (T2)

Due within 6 months of the fiscal year end in which you cease operations
Must report all income up to the date you stopped
Any remaining assets distributed to shareholders trigger a deemed disposition at fair market value

Final GST/HST Return

File for the reporting period that includes your last day of operations
Report any GST/HST collected but not yet remitted
You may be able to claim ITCs on wind-up expenses

Final Payroll Returns

T4 slips for all employees, including yourself if you were on payroll
T4 Summary filed with CRA
Final payroll remittance within 7 days of the last pay

Step 3: Close Your CRA Accounts

Call CRA’s business enquiries line (1-800-959-5525) or use My Business Account online to close:

Your GST/HST account
Your payroll account (RP)
Your corporate income tax account (RC)
Any import/export accounts
Any provincial sales tax (PST/QST/RST) accounts with the provincial agencies

Don’t close these accounts until all final returns are filed and balances are settled. CRA needs active accounts to process your final filings.

Step 4: File Articles of Dissolution

This is the legal step that actually ends the corporation’s existence.

Federal Corporation (Corporations Canada)

File Articles of Dissolution with Corporations Canada
The corporation must have no property and no liabilities before filing
Shareholders must approve the dissolution by special resolution
Filing fee: $0 online, $50 by mail

Ontario Corporation

File Articles of Dissolution with the Ontario Business Registry
Obtain a Consent to Dissolve letter from the Ontario Ministry of Finance (confirms no provincial tax debts)
This consent letter must be submitted within 60 days of issuance
Filing fee: approximately $25

Other provinces have similar processes. Check with your provincial corporate registry.

Step 5: Don’t Forget These

Cancel your business name registration if you have a master business licence or registered trade name.
Cancel business insurance policies and any recurring subscriptions or services.
Close business bank accounts after all cheques have cleared and all final payments are received.
Keep your records. CRA requires you to keep corporate records for at least 6 years after dissolution. Don’t throw anything away.
WSIB. If you had workers’ compensation coverage, notify WSIB (or your provincial equivalent) to close the account.

Tax Implications for Shareholders

When assets are distributed to shareholders during wind-up, the tax treatment depends on what’s being distributed:

Paid-up capital returned: Tax-free to the shareholder (it’s your original investment coming back)
Amounts exceeding paid-up capital: Treated as a deemed dividend, taxable on your personal return
Capital dividend account balance: Can be distributed tax-free if a capital dividend election is filed (Form T2054)

This is where having your accountant involved pays for itself. The order and structure of distributions can make a big difference in how much tax you end up paying.

Common Mistakes When Closing a Corporation

Not filing the final T2. CRA will estimate your income and send you a bill. With penalties.
Forgetting to close the GST/HST account. You’ll keep getting nil return requests and penalties for not filing them.
Not getting the provincial consent letter. You can’t dissolve without it, and it expires after 60 days.
Distributing assets before settling debts. Directors can be held personally liable for outstanding corporate debts including payroll remittances and GST/HST.
Throwing out records too early. Keep everything for 6 years minimum. CRA can and does audit dissolved corporations.

Frequently Asked Questions

How long does it take to close a corporation in Canada?

From start to finish, typically 2 to 6 months. The biggest delays are usually waiting for the final tax assessments from CRA and getting the provincial consent letter. If everything is straightforward, it can be faster.

Can I just stop filing and let the corporation die?

Technically, some provinces will eventually dissolve an inactive corporation for not filing annual returns. But CRA doesn’t care if the province dissolved it. You still owe all outstanding tax returns, and penalties pile up the entire time. Don’t go this route.

Am I personally liable for the corporation’s debts?

As a director, you can be personally liable for unremitted payroll deductions (CPP, EI, income tax withheld) and unremitted GST/HST. This liability doesn’t go away when the corporation is dissolved. Get these settled first.

Need Help Closing Your Corporation?

Closing a corporation properly involves tax planning, compliance filings, and legal steps that need to happen in the right order. If you’re thinking about winding down, contact us before you start. We’ll make sure everything is done right and you’re not leaving any loose ends for CRA to find later.