To permanently close your company, the requirements for dissolving a provincial corporation in New Brunswick mandate filing Articles of Dissolution with Service New Brunswick. The standard government filing fee is $60 CAD, and you must ensure all Canada Revenue Agency (CRA) accounts are fully settled before closing.
Deciding to close a business is a major milestone, and understanding the legal requirements for dissolving a provincial corporation in New Brunswick is critical to doing it right. Whether your company has simply run its course, you are retiring, or you are moving on to a new venture, you cannot just lock the doors and walk away. 💼 If you fail to formally dissolve the business, the corporation technically continues to exist, meaning you remain legally obligated to file annual corporate returns and pay corporate taxes.
Many business owners mistakenly believe that if they stop making money, the business automatically closes. In reality, the provincial government and the Canada Revenue Agency (CRA) will continue expecting tax filings until the legal entity is officially wound up. In this guide, we will outline the specific steps required to securely dissolve your corporate entity in cities like Moncton, Fredericton, and Saint John.
Step-by-Step Process in New Brunswick
Closing a provincial corporation involves strict compliance with the New Brunswick Business Corporations Act. Generally, you must ensure that all shareholders agree to the closure and that no creditors are left unpaid. Here is how most applicants in the province navigate the corporate dissolution process.
Step 1: Passing a Shareholder Resolution
The first requirement is obtaining official approval from the people who own the company. If your business has multiple shareholders, you must hold a formal meeting to vote on closing the business. 📝 Typically, this requires a “special resolution,” meaning at least two-thirds (66.6%) of the voting shareholders must agree to formally wind up the company and distribute any remaining assets.
Step 2: Paying Off Debts and Closing CRA Accounts
Before you can dissolve the corporation, all outstanding debts must be fully paid. This includes paying off suppliers, settling bank loans, and ensuring employee wages are covered. Most importantly, you must file your final corporate tax returns with the Canada Revenue Agency (CRA), remit any collected HST/GST, and request that the CRA officially close your payroll and tax accounts.
Step 3: Filing Articles of Dissolution
Once your debts are cleared and assets are distributed, the final step is filing the Articles of Dissolution (Form 11) with the Corporate Registry at Service New Brunswick. 📬 This official form legally terminates the corporation’s existence. Your law firm or accountant will typically prepare this document, ensure it is signed by a current director, and submit it directly to the provincial registry for processing.
How Much Does it Cost in New Brunswick?
The costs associated with closing a business extend beyond the government filing fee. You will typically need assistance from both a corporate lawyer and a chartered accountant. Below is an overview of the typical costs in New Brunswick:
| Expense Type | Estimated Cost (CAD) |
|---|---|
| Service New Brunswick Filing Fee | $60 CAD |
| Corporate Lawyer Fees (Drafting Resolutions) | $500 – $1,500 CAD |
| Accounting Fees (Final Tax Returns) | $1,000 – $3,000+ CAD |
| Publishing a Notice to Creditors (If Required) | $100 – $300 CAD |
It is important to remember that if your business has significant debts or complex remaining assets, your accounting and legal fees will naturally be higher. Always ask your legal and financial advisors for a clear estimate before beginning the process.
How Long Does the Process Take?
The timeline heavily depends on how quickly you can settle your company’s affairs. ⏱ Filing the actual Articles of Dissolution with Service New Brunswick usually takes only 1 to 3 weeks once submitted. However, preparing for this step by liquidating inventory, paying off creditors, and getting final tax clearances from the CRA often takes 4 to 8 months for an active business.
Frequently Asked Questions (FAQ)
What happens if I just abandon my corporation in New Brunswick?
If you simply stop filing annual returns, Service New Brunswick will eventually dissolve your corporation for non-compliance. However, doing this is incredibly risky, as the CRA will continue to assess estimated corporate taxes and impose penalties, which directors may become personally liable for.
Do I need a lawyer to dissolve my company?
While the law does not strictly require you to hire a corporate lawyer, it is highly recommended. A lawyer ensures that your shareholder resolutions are legally binding, your corporate minute book is properly closed out, and you are fully protected from future lawsuits by former creditors.
Can a dissolved corporation be brought back to life?
Yes. Under the New Brunswick Business Corporations Act, it is possible to file Articles of Revival to reinstate a dissolved corporation. This is often done if the company suddenly discovers a valuable asset (like a tax refund) that it could not claim while dissolved.
Am I personally responsible for the corporation’s remaining debt?
Generally, a corporation offers limited liability, meaning shareholders are not personally responsible for corporate debts. However, directors can be held personally liable for unpaid employee wages and unremitted HST/GST or payroll deductions owed to the CRA.
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