Entrepreneurship & Small Business

financial year for new incorporated Alberta company

  • Last Updated:
  • Dec 7th, 2017 2:25 pm
[OP]
Member
Feb 16, 2013
443 posts
60 upvotes

financial year for new incorporated Alberta company

Hello,

I have registered my company name which is incorporated in June 2017. I haven't applied for business license and GST no and business bank account. yet, so I haven't done any business.
My question is
1) What is the financial year for incorporated company - is it January to December?
2) As I haven't done any business this year, do I have to file taxes.
3) If answer to question 2 is no and would you recommend to get business license, business bank account and GST no. this year or should I start from new year?

Thanks in advance.
2 replies
Deal Addict
Feb 5, 2009
2397 posts
554 upvotes
Newmarket
1) You set up a year end that works for your company, any month end, not just January to December.
2) Yes you have to file tax returns.
3) depends on many factors, there are businesses that are gst exempt for example.
Deal Addict
Aug 28, 2007
1813 posts
227 upvotes
Calgary
1/ I agree with HomerHomer. And I would even go so far as to say that Jan 01 to Dec 31 is the worst choice for a fiscal year end. Choosing that date means you will be trying to close your business year end at the craziest time of year. Christmas stat holidays, your own travel for vacations, bad weather, airline travel delays, staff absences, Christmas parties, kid's school vacations, all the non-business related activities from your kids, spouse, vendors etc. And if you are even remotely associated with retail it would also be the busiest financial time of year. Why would you want to reconcile & close your books during that time? Furthermore, there is also the echo when it comes time to do taxes... 90 days later. About half of Canada businesses use Dec 31 as their year end, so they are all trying to get their accountants attention for Mar 31. Meaning from Feb to May your accountant will be sleep deprived, and running on caffeine. Obviously s/he'll have plenty of time to muse about new tax planning ideas with you. Personally I like any month end date between May 31 and September 30. No rushing around, making mistakes... everything can be civilized with no artificial deadlines.

2/ Yes you will have to file tax returns. However, when you set up a new corporation you have some time & latitude to set your fiscal year end. I believe it can be a bit longer than 12 months after incorporation date but I'm not sure exactly so check with your accountant. Given you didn't incorporate until June, 2017 you have at least until June 2018 before you need to close your first year's books. If you do earn any revenue by June 2018, you won't need to pay your first taxes until 3 months after that (Sept 2018). And another 3 months after that (Dec 2018) before you need to get an accountant to file you first tax return. Since you haven't done any business yet and you haven't actually set up any CRA accounts yet, you are somewhat invisible. Inter-governmental information transfer is not that efficient, so you can probably even delay beyond those without too much financial risk.

3/ Setting up accounts is important. Alternatively, instead I would suggest you light a fire under yourself and get out and make some sales... all the rest of this administrivia takes care of itself when your business actually starts doing something.

Top