How do I close my corporation properly?
Winding up is a sequence: settle up, file final returns, close your CRA accounts, then dissolve — and keep the records afterward. Skipping steps leaves the corporation undead.
A corporation does not die when you stop using it — it keeps existing, and keeps owing filings, until you dissolve it properly.
The sequence
Settle debts and distribute remaining assets (distributions have tax consequences worth planning). File a final T2 marked as the last return, and final HST and payroll filings. Close the CRA program accounts — HST, payroll, corporate tax — so nothing keeps demanding returns. Then file articles of dissolution with your incorporating jurisdiction.
The step everyone skips
Records survive the corporation: keep the books, and especially the minute book and share records, for two years after dissolution (longer for anything under dispute). CRA can still ask questions of a dissolved corporation’s directors.
The zombie alternative
Just walking away means late-filing penalties stacking on a corporation you forgot, and eventually an involuntary dissolution with loose ends. If the business is done, finish it on purpose — it is usually one focused season of paperwork.
This is general information, not tax advice for your situation. Book a call and a Canadian accountant will give you the answer for your business.
Common questions
Do I need CRA clearance before dissolving?
A clearance certificate protects whoever distributes the corporation's assets from personal liability for unpaid taxes. For corporations with anything left to distribute, it is the safe order of operations.
What happens to money left in the corporation when it closes?
It comes out to shareholders as a final distribution, with tax treatment that depends on the amounts and history involved. Planning the wind-up with an accountant often changes what you keep.