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[OP]
Deal Addict
Jul 21, 2005
1791 posts
898 upvotes
Alberta

Closing down a business?

Hi Guys,

About a year and a few month ago, I quit my full time job and became an independent IT consultant. I worked with one company on contract for the whole time my company has been in existence, as well as with another small client.

Just a few days ago I was offered full time employment at one of my clients that I am thinking of taking up, at which point I don't want to keep my business afloat anymore and just close her down. I have a few questions for anyone who has closed out a business. Keep in mind that I have no employees and have always paid myself as an investor, therefore there is no payroll or anything like that to worry about.

1. I just finished paying my second installment for the year for corporate taxes and GST, which covers right until the end of June. If I take full employment now, do I just stop paying installments, or do I have to keep paying the full installments and then get a refund when my corporate taxes are done?

2. What do I do with my financial books? All my data is in QuickBooks online. I obviously don't want to pay their monthly sub fee for any longer than I have to. It appears that my data will go into read-only mode for one year after I cancel the sub which is great as I can use it to do my taxes. But how about historical data...don't I have to keep a record of it for like 7 years or something....? Can I just export all the relevant reports right out of QBO before I cancel?

3. Do I have to wait until next year to do my closing corporate taxes?

4. Bank accounts. I pay a monthly fee for a corporate account. Can I cancel this account and pull all money out into a separate personal account, and keep it until I finish all my corporate returns for the year, and whatever is left over hand out as dividend?

5. Anything else I am missing?
12 replies
Deal Expert
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Aug 2, 2010
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Here 'n There
Why did you even bother to incorporate? Since you only had one client for your company incorporation did not provide you with any advantages, only costs.
[OP]
Deal Addict
Jul 21, 2005
1791 posts
898 upvotes
Alberta
eonibm wrote: Why did you even bother to incorporate? Since you only had one client for your company incorporation did not provide you with any advantages, only costs.
Was a requirement from the client. The costs were pretty minimal at the end of the day, as I did all my own accounting for the most part.
Member
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Nov 10, 2009
427 posts
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Hamilton
#1 and #3 - Set your closing date for the business, get all the bookkeeping done, and file your corp taxes now. Then when you calculate whther you owe or have a refund on corp tax and HST you can get that done. Then close the accounts with CRA. No need to wait until next year to do all this stuff.

The bank account- I imagine you would take a dividend, after all it is your money. But check with your accountant.

QBO I can have a look through my account and see how you can get records for this.
Dame Edna: I think of a talk show as... well... a monologue interrupted by total strangers.
Member
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Nov 10, 2009
427 posts
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Hamilton
#2 QBO bookkeeping

I would keep the subscription going until your corp tax has been filed.

I would run the following reports by Fiscal Year and then export to Excel or pdf.

Profit & Loss and Balance sheet are found under Recommended.
Trial Balance and General Ledger are found under Accountant


Let me know if you have any questions.
Dame Edna: I think of a talk show as... well... a monologue interrupted by total strangers.
[OP]
Deal Addict
Jul 21, 2005
1791 posts
898 upvotes
Alberta
gennif wrote: #1 and #3 - Set your closing date for the business, get all the bookkeeping done, and file your corp taxes now. Then when you calculate whther you owe or have a refund on corp tax and HST you can get that done. Then close the accounts with CRA. No need to wait until next year to do all this stuff.

The bank account- I imagine you would take a dividend, after all it is your money. But check with your accountant.

QBO I can have a look through my account and see how you can get records for this.

For the taxes part, how would I do them? Last year I bought FutureTax T2 to do my taxes, but it was for a specific year end tax period. Will I have to do them manually with paper forms, or would similar software allow me to do my 2016 taxes now?
Member
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Nov 10, 2009
427 posts
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Hamilton
Hmm you raise a good point. the 2016 tax software isnt out yet. My guess would be that you close the business but you would file next year.

I can ask around with my colleagues.
eblend wrote: For the taxes part, how would I do them? Last year I bought FutureTax T2 to do my taxes, but it was for a specific year end tax period. Will I have to do them manually with paper forms, or would similar software allow me to do my 2016 taxes now?
Dame Edna: I think of a talk show as... well... a monologue interrupted by total strangers.
[OP]
Deal Addict
Jul 21, 2005
1791 posts
898 upvotes
Alberta
gennif wrote: Hmm you raise a good point. the 2016 tax software isnt out yet. My guess would be that you close the business but you would file next year.

I can ask around with my colleagues.
I just looked on Future Tax T2 site and it shows that 2016 software is out in June....so it should be out any week now. I think once that comes out I should be able to close shop by end of July. Yay
Member
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Nov 10, 2009
427 posts
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Hamilton
Yayyyy. Yes I would say so. And good luck with your new job.
Dame Edna: I think of a talk show as... well... a monologue interrupted by total strangers.
[OP]
Deal Addict
Jul 21, 2005
1791 posts
898 upvotes
Alberta
Another question perhaps I can get assistance with. Looking at this site, I am confused which forms I have to fill out:

http://corporationscanada.ic.gc.ca/eic/ ... 03935.html

It talks about Form 17 and Form 19....but I am confused if I have to fill out both, or just one of them. Form 17 talks about Dissolution, Form 19 intent to dissolve.....:

"
To obtain a Certificate of Dissolution, a completed and signed copy of Form 17 – Articles of Dissolution must be submitted to Corporations Canada. There is no filing fee.

To obtain a Certificate of Intent to Dissolve, a completed and signed copy of Form 19 – Statement of Intent to Dissolve must be submitted to Corporations Canada. There is no filing fee.
"


Also, I usually submit my taxes online, did so last year for my corporation, but saw references to having to submit various forms with my return, like these statements of dissolution....do I send them to CRA separately by snail mail, or how?

Thanks
Member
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Nov 10, 2009
427 posts
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Hamilton
When you file your corp tax return, there might be a spot where it asks you if this is your final year of business. Try looking in the help section or the form generator for this statement of dissolution form you need.
Dame Edna: I think of a talk show as... well... a monologue interrupted by total strangers.
[OP]
Deal Addict
Jul 21, 2005
1791 posts
898 upvotes
Alberta
So I have completed most of my 2016 taxes, but just curious on how to handle the remaining funds. I have about 25k left after paying off all the taxes and such in the corporation. Should I issue myself a dividend for that amount, or is there some other thing I have to do?
Member
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Nov 10, 2009
427 posts
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Hamilton
Sorry eblend I can't help you with this one. Im not a tax person. Perhaps buy an hour or 2 from an accountant or tax person.
Dame Edna: I think of a talk show as... well... a monologue interrupted by total strangers.

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