Personal Finance

Tax for a not-operating company

  • Last Updated:
  • Nov 15th, 2018 6:28 am
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[OP]
Jr. Member
User avatar
Oct 15, 2006
104 posts
7 upvotes
Alberta

Tax for a not-operating company

Last year, I was about to leave my company. I am a full-time employee. I opened a sole proprietorship company in the registry but forgot about it. I didn't do anything after then as my issues have resolved with my current employer.

Today, I just remembered that.

My questions:
- The company did not do any business, do I need to file taxes?
- It is now 14 months passed, should I do it every year?
- If it is zero non-working company not operating, can I just close it and no need to file taxes?
-What is the easiest way to file taxes if needed?
- I went to the registry so I can pause it or make the company non-working status but they told me you can only close it. Are they correct?

What do you advise?
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8 replies
Deal Addict
Jan 30, 2012
1397 posts
616 upvotes
TORONTO
This forum is called "Personal Finance", not "Corporate Finance" :)

Go talk to an accountant, it will take 30 minutes.
Sr. Member
Aug 15, 2013
736 posts
369 upvotes
Guelph
covergirl wrote:
Nov 9th, 2018 5:17 am
Last year, I was about to leave my company. I am a full-time employee. I opened a sole proprietorship company in the registry but forgot about it. I didn't do anything after then as my issues have resolved with my current employer.

Today, I just remembered that.

My questions:
- The company did not do any business, do I need to file taxes?
- It is now 14 months passed, should I do it every year?
- If it is zero non-working company not operating, can I just close it and no need to file taxes?
-What is the easiest way to file taxes if needed?
- I went to the registry so I can pause it or make the company non-working status but they told me you can only close it. Are they correct?

What do you advise?
By sole proprietorship company, do you mean incorporated company and you are the owner? This form has a distinct identify and is different than a sole proprietor business where the business is just an extension of yourself.

Anyways, i dont think you need an accountant if your aim is simply to close the business for tax purposes. Call CRA and tell them the same, they will guide you through the process. They might ask you for some written instructions or to fill a form, but that should do it. AFAIK, if its just a sole proprietor business i.e. not incorporated, you don't need to do anything, but check that with CRA,
Deal Addict
Jul 3, 2017
3027 posts
2052 upvotes
There's a Small Business forum here on RFD: entrepreneurship-small-business-f62/

I think the practical answer is that if your company has never done any business and never filed a tax return in the past, you don't have to do anything - regardless of any official advice you might receive.
Member
Nov 12, 2014
446 posts
248 upvotes
Kingston, ON
Exp315 wrote:
Nov 9th, 2018 9:38 am
There's a Small Business forum here on RFD: entrepreneurship-small-business-f62/

I think the practical answer is that if your company has never done any business and never filed a tax return in the past, you don't have to do anything - regardless of any official advice you might receive.
If it's a Corporation then you have to file a T2 return even if there is no activity....surprised CRA hasn't asked for that yet.
Deal Fanatic
User avatar
Feb 19, 2010
5259 posts
2084 upvotes
There's definitely a distinction between a 'sole proprietorship', as the OP mentioned, and a 'corporation' but certainly some people used the two interchangeably. Need to first figure out which one it is before anybody can provide salient advice without the speculation.
Deal Addict
Jan 2, 2015
1297 posts
347 upvotes
Toronto, ON
covergirl wrote:
Nov 9th, 2018 5:17 am
Last year, I was about to leave my company. I am a full-time employee. I opened a sole proprietorship company in the registry but forgot about it. I didn't do anything after then as my issues have resolved with my current employer.

Today, I just remembered that.

My questions:
- The company did not do any business, do I need to file taxes?
- It is now 14 months passed, should I do it every year?
- If it is zero non-working company not operating, can I just close it and no need to file taxes?
-What is the easiest way to file taxes if needed?
- I went to the registry so I can pause it or make the company non-working status but they told me you can only close it. Are they correct?

What do you advise?
A business might have to file multiple returns. Since your business is (apparently) not a corporation, you never needed to file a T2 and couldn't (and didn't) file dividends. I presume you never hired staff, so there's no need to worry about payroll.

But GST... that's where you could get into trouble. If you never made more than $30,000 in revenue over four successive quarters, then you probably never applied for a GST account. In which case, it sounds like you don't need to do anything. But if you did have to remit GST and file GST returns, then you need to call the CRA and let them know your business shut down. Otherwise you'll get letters demanding GST returns.

This registry has me confused though. Is that a provincial thing?
[OP]
Jr. Member
User avatar
Oct 15, 2006
104 posts
7 upvotes
Alberta
FoFai2015 wrote:
Nov 11th, 2018 2:59 pm
A business might have to file multiple returns. Since your business is (apparently) not a corporation, you never needed to file a T2 and couldn't (and didn't) file dividends. I presume you never hired staff, so there's no need to worry about payroll.

But GST... that's where you could get into trouble. If you never made more than $30,000 in revenue over four successive quarters, then you probably never applied for a GST account. In which case, it sounds like you don't need to do anything. But if you did have to remit GST and file GST returns, then you need to call the CRA and let them know your business shut down. Otherwise you'll get letters demanding GST returns.

This registry has me confused though. Is that a provincial thing?
I have never issued an invoice or even advertised my business or hired anyone. It is a self-employed name/company and I have never made a penny. I was leaving my company and decided may be it is the next step. As things resolved as it is now, I just forgot about it. My income is over $150K as a full-time employee. Do I need to still worry about the GST?
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Deal Addict
Jan 2, 2015
1297 posts
347 upvotes
Toronto, ON
covergirl wrote:
Nov 15th, 2018 12:46 am
I have never issued an invoice or even advertised my business or hired anyone. It is a self-employed name/company and I have never made a penny. I was leaving my company and decided may be it is the next step. As things resolved as it is now, I just forgot about it. My income is over $150K as a full-time employee. Do I need to still worry about the GST?

No. (Assuming you made less than $30,000 in revenue.)

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