For companies incorporated in British Columbia (BC), there are two important obligations to fulfill each year: (1) annual corporate maintenance and (2) filing an annual report. While these terms may sound similar, they represent distinct responsibilities that a BC company must address.
This article aims to clarify the difference between annual corporate maintenance and filing an annual report, with the aim of providing owners of BC companies with a clear understanding of these essential requirements.
If this sounds overwhelming, don’t worry—you are not alone. At the end of this article, we describe how to easily take care of these requirements and keep your BC company in good standing.
First, make sure that you have a BC company.
The term “BC company” refers to a corporation incorporated under the BC provincial law, the Business Corporations Act (British Columbia).
If you are still determining whether or not you have a BC company, then you can check out our post about figuring out where your company is incorporated.
Annual corporate maintenance and annual report filings only need to be carried out by specific types of companies, namely companies incorporated under BC law and extra-provincial companies that are registered in BC and conducting business within the province. Certain entities, such as sole proprietorships and partnerships, are generally not required to file an annual report or carry out annual maintenance.
Annual Corporate Maintenance
Annual corporate maintenance refers to the ongoing administrative tasks that companies must perform to maintain compliance with BC laws and regulations. In addition to being required by law, annual corporate maintenance is a great business practice as well—it keeps your company’s records clean and up to date, which will help you to avoid expensive headaches in the future and will position you to act faster on opportunities to grow, finance, or sell your business.
Annual corporate maintenance involves several steps. Most of these steps can be taken during in-person meetings (think Board Meetings and shareholder AGMs), but it is much more common for all steps to be taken “on paper”.
Key steps involved in annual corporate maintenance for a BC company include:
Board Meeting or Resolution
The board of directors of a BC company needs to take care of certain business every year. One of the most important pieces of business is reviewing the financial statements prepared by the corporation’s accountant. Once the directors are satisfied with the financial statements, they need to pass a resolution approving of the financial statements and authorizing a representative to sign the financial statements on behalf of the corporation.
Shareholder Meeting or Resolution
The voting shareholders of a BC company also need to take care of certain business every year. Most notably, they need to receive the financial statements once the directors approve them. The shareholders then have an opportunity to review and ask questions about the financial statements. Once the shareholders have received and reviewed the financial statements, they need to pass a resolution acknowledging receipt of the financial statements. Typically the shareholders elect (or re-elect) directors of the Corporation at the same time. In most small private corporations, the shareholders also pass a resolution or sign a waiver, waiving their right to receive audited financial statements.
Minute Book Maintenance
A minute book is a central record of the company’s official documents, resolutions, and other records. It includes the company’s articles of incorporation, bylaws, shareholder agreements, meeting minutes, securities register, directors register, transparency register, and other essential records. As part of annual corporate maintenance, it is a best practice to review the minute book and ensure that it is complete and that all information contained in it is up to date. This is particularly true now that BC requires every BC company to keep a Transparency Register and to review it on an annual basis.
If you are involved in a small BC company (for example, a corporation owned by family members), you might think that these annual maintenance requirements are too formal for your business. But in reality, it is easy to take care of (using tobuso.ca), and it will help you maintain the strong and clean legal foundation that your business depends on; easy maintenance pays off in the long run.
Filing an Annual Report
Filing an annual report is a separate requirement that BC companies must fulfill every year.
For general information about BC Annual Reports, including the due date for Annual Reports, you can check out our video and blog post about BC Annual Reports.
The annual report provides the government of BC with basic information about the corporation so that BC Registries knows that the corporation is still active and that the information on file about the corporation is up to date.
In the annual report, the corporation needs to confirm that certain information is up to date, including its registered office address, list of directors, and list of officers (optional).
BC companies have specific deadlines for filing their annual reports. The filing due date is typically determined by the company’s anniversary date, which is the date the company was initially incorporated or registered in BC, and the period for filing a BC annual return begins on the company’s anniversary date and ends two months after that.
There is a filing fee of $43.39 charged by BC Registries at the time of filing the BC annual report.
Once the filing is complete and the fee is paid, BC Registries will issue a confirmation of the filing. The confirmation of filing is typically stored in the corporation’s Minute Book.
If you do not file your BC annual report, you risk involuntarily having your corporation dissolved by BC Registries.
Ongoing Maintenance and Filings
As a reminder: In addition to the annual maintenance and filings, ongoing obligations arise throughout the year if certain changes occur. For example, if there is a change of address or a change of director, then certain resolutions need to be passed and notices filed with BC Registries. Those changes are in addition to the annual maintenance and annual report filing requirements described in this article.
How should I take care of all of this?
The Tobuso platform is designed to help you easily meet your maintenance and filing requirements year in and year out. Click here to get started!
All that you need to do is to set up your company at tobuso.ca; begin by signing up, and from there, just follow the prompts. It’s fast, easy, and affordable. And if you run into any problems along the way, you can contact us to get help.
