If you have a federal corporation, you may be wondering what is required of your company to stay compliant. Below are some key things you’ll need to be on top of to ensure that your corporation remains in good standing and up-to-date. The Canada Business Corporations Act governs federal corporations; however, please note that, as a Federal corporation, you should also be registered within the province of your corporation’s head office (and any province you carry on business in). Those jurisdictions may also have annual maintenance and other filing requirements on top of the corporation’s federal obligations.
Filing the Corporation’s Annual Return Every Year
Every federal corporation is required to file an Annual Return. The deadline for filing an annual return is within the 60 days following a corporation’s anniversary date. The anniversary date is the date when the corporation is incorporated, amalgamated or continued under the CBCA (this date can be found on the corporation’s Certificate of Incorporation, Amalgamation or Continuance). It is not required to be filed for the year the corporation was incorporated, amalgamated or continued. If you can’t find your corporation’s certificate, it is also available on the Corporations Canada’s online database.
Carrying out Internal Annual Maintenance Requirements
Every year, corporations are required to hold an Annual General Meeting of shareholders (“AGM”) or pass a resolution in lieu of the AGM. The directors of a corporation are required to organize the AGM, which is typically called once the financial statements have been prepared for the last fiscal year—as the directors also need to share those with the shareholders. It is very common, especially for smaller corporations, to pass a resolution in lieu of a formal meeting.
The rules for when an AGM needs to be held (or a resolution needs to be passed) are as follows:
As per section 133 (1) of the CBCA, ‘The directors of a corporation shall call an annual meeting of shareholders:
- not later than eighteen months after the corporation comes into existence;
- subsequently, not later than fifteen months after holding the last preceding annual meeting but no later than six months after the end of the corporation’s preceding financial year.’
Below is a list of common matters that Shareholders may discuss during an AGM or confirm via resolution:
- Appointment of an auditor for the next fiscal year or choose not to appoint an auditor (if the corporation is non-distributing)
- Elect and confirm the directors of the corporation
- Appoint an Accountant
- Confirm receipt of the financial statements
- Confirm and approve any action taken by directors or officers as necessary
It is also typical for corporations to pass directors’ resolutions at the same time. This is for directors to appoint or confirm who the officers of the corporation are, as well as confirm the approval of the financial statements.
To learn more about Annual Maintenance requirements, read our detailed article about it here.
Appropriately Recording Events of a Corporation
As a company goes through changes, it is important to keep a proper record of those changes. For example, if shares are transferred from one shareholder to another, this transfer should be appropriately documented, and the registers should be updated accordingly.
Other common changes that should be formally approved (by either the directors or shareholders), documented and properly recorded are:
- Change of head office address
- Change of directors (resignations, elections, change of address, etc.)
- Change of officers
- Share-related activities (transfer of shares, purchase of shares, redemption of shares, etc.)
Updating Corporations Canada when Changes Occur
Once the appropriate steps have been taken internally to record changes, as discussed above, some of these changes need also be filed with Corporations Canada. For example, if a corporation has a change to its registered head office address or if there is a change in directorship, it is the corporation’s responsibility to notify Corporations Canada of those changes. Corporations Canada should be notified within 15 days of the change coming into effect. The address of a corporation and the name and address of directors are public information that needs to be kept up-to-date.
We hope this article gives you a better understanding of what is required of a Federal for-profit corporation. Check out our other articles on federal corporations, such as “Forming a Federal Corporation in Canada”, or contact us today if you have any questions.
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