The annual maintenance cycle for a CBCA corporation

A federally incorporated company carries a short list of recurring obligations under the Canada Business Corporations Act (CBCA). None of them is difficult. What makes them easy to miss is that they run on two different calendars, and that the most visible one, the annual return, is routinely confused with the tax return. This article walks the cycle in the order it comes due for a typical private corporation with a small number of shareholders.

Two calendars: the anniversary date and the financial year

The first calendar starts on the corporation's anniversary date: the date it was incorporated, amalgamated or continued under the CBCA. Corporations Canada requires the annual return within the 60 days following that date each year, and does not require one for the year of incorporation (Policy on annual filings).

The second calendar starts at the financial year end. It drives the annual meeting of shareholders, the financial statements placed before them, and, on the tax side, the T2 return, which the Canada Revenue Agency requires within six months after the end of each tax year (CRA, when to file).

The annual meeting, or the resolutions that replace it

Directors must call the first annual meeting of shareholders not later than 18 months after the corporation comes into existence, and each later one not later than 15 months after the last annual meeting but no later than six months after the end of the preceding financial year (CBCA s. 133(1)). The six-month outer limit is the one that bites: a corporation with a December year end has to hold, or paper, its annual meeting by the end of June.

Three things happen at that meeting:

• Directors are elected by ordinary resolution, for a term ending not later than the close of the third annual meeting following the election (s. 106(3)). A director elected without a stated term ceases to hold office at the close of the next annual meeting, though incumbents continue until successors are elected (s. 106(5) and (6)).
• Directors place comparative financial statements before the shareholders, covering a period that ended not more than six months before the meeting (s. 155(1)).
• Shareholders appoint an auditor by ordinary resolution to hold office until the close of the next annual meeting (s. 162), unless they dispense with one. The shareholders of a corporation that is not a distributing corporation may resolve not to appoint an auditor, but the resolution is valid only if consented to by all shareholders, including those not otherwise entitled to vote, and only until the next annual meeting (s. 163). The audit waiver is therefore an every-year document, not a one-time election.

For most private corporations none of this happens in a room. A resolution in writing signed by all the shareholders entitled to vote is as valid as if it had been passed at a meeting, and a written resolution dealing with all matters the Act requires at a meeting satisfies the meeting requirements (s. 142(1)). The same rule applies to directors (s. 117). Copies of both must be kept with the minutes.

The practical output is an annual resolutions package: shareholders receive the financial statements, elect directors and waive the audit; directors approve the financial statements, appoint officers and confirm the registered office. Date the resolutions on or before the six-month deadline.

The annual return, which is not the tax return

Every corporation must send the Director an annual return in the form and within the period the Director fixes (s. 263). Corporations Canada fixes that period at 60 days after the anniversary date, and will not accept a return filed before the anniversary date, because the information has to reflect the corporation's situation on that date. Filing online costs $12; by email or mail, $40 (Annual return versus tax return).

Corporations Canada keeps a page on the distinction, and it says of the annual return and the income tax return that "The 2 are fundamentally different." The annual return is a corporate-law filing made with Corporations Canada; the income tax return is filed with the Canada Revenue Agency and "is completely separate from any filing obligations you may have with Corporations Canada" (Annual return versus tax return).

Miss it and two things follow. The corporation's status shows as overdue on the public database and it cannot obtain a Certificate of Compliance. Then the Director may dissolve a corporation that has been in default for one year in sending a required document or fee, after giving 120 days' notice (s. 212(1) and (2)). Corporations Canada's stated policy is to dissolve only after two years of non-filing, preceded by a final notice with a further 120 days to file. Dissolution ends the corporation's legal existence; revival is a separate application to Corporations Canada.

The ISC register: once a year, and within 15 days

Since January 22, 2024, CBCA corporations file information from their register of individuals with significant control (ISCs) with Corporations Canada at the same time as the annual return (s. 21.21(1)(a); Corporations Canada, ISCs). That makes the register part of the annual cycle even when nothing has changed.

The register itself must be refreshed at least once during each financial year, when the corporation takes reasonable steps to confirm it has identified every ISC and that the information is accurate and complete (s. 21.1(2)). Any new information must be recorded within 15 days of the corporation becoming aware of it (s. 21.1(3)), and sent to the Director within 15 days after it is recorded (s. 21.21(1)(b)). Corporations Canada treats an annual request for information to every ISC and every shareholder as the baseline for "reasonable steps". A separate article in this cluster covers what the register must hold and who is an ISC.

Changes that trigger a filing within 15 days

Two events outside the annual cycle carry their own clocks:

• A change among the directors must be reported to the Director within 15 days after it is made, and a director's change of address within 15 days after the corporation receives the director's notice of it (s. 113(1)). Directors must send the corporation that notice within 15 days of changing their address (s. 113(1.1)).
• A change of registered office address must be reported within 15 days (s. 19(4)). Filing is free online within the same province; moving to another province requires an amendment to the articles, which is a different filing.

What the minute book has to hold

The records that make the cycle provable live at the registered office, or another place in Canada the directors designate. The Act requires the articles and by-laws with all amendments and a copy of any unanimous shareholder agreement, minutes of meetings and resolutions of shareholders, copies of the notices of directors filed under sections 106 and 113, and a securities register (s. 20(1)). The corporation must also keep adequate accounting records and the minutes and resolutions of directors and committees (s. 20(2)).

The securities register records, for each class or series, the names in alphabetical order and latest known address of each present or past security holder, the number of securities each holds, and the date and particulars of each issue and transfer (s. 50(1)). The ISC register sits alongside it under section 21.1.

A working calendar

Trigger	Obligation	Source
Financial year end + 6 months	Annual meeting or signed annual resolutions; financial statements; auditor appointed or waived	CBCA s. 133, 142, 155, 162, 163
Financial year end + 6 months	T2 corporation income tax return	CRA
Anniversary date + 60 days	Annual return and ISC filing ($12 online)	CBCA s. 263, 21.21; Corporations Canada
Once each financial year	Reasonable steps to update the ISC register	CBCA s. 21.1(2)
Within 15 days	Record ISC information; file it with the Director	CBCA s. 21.1(3), 21.21(1)(b)
Within 15 days	Notice of change of directors or director address	CBCA s. 113
Within 15 days	Notice of change of registered office	CBCA s. 19(4)

This is the cycle Misolla is built to track for federal corporations, with every filing prepared for a lawyer's approval rather than sent on its own.

This article is general information, not legal advice; a lawyer must review your specific situation.