Catch-up
Can you close a corporation that is years behind on tax?
2026-10-09 · 6 min read · Tax Everyday, Vaughan
You can close it. You cannot disappear it. A corporation that is years behind still has a tax year for every year it existed. CRA expects the T2s, including a final return for the year the company winds up. If an HST account or a payroll account was opened, those returns have to be filed and the accounts closed too. Ontario, or Corporations Canada if you are federal, has its own dissolution steps. Skipping the tax steps and only filing a registry dissolution leaves the CRA accounts open.
Unremitted HST and payroll can still be assessed against a director even if the company is later dissolved. Ordinary unpaid corporate tax remains a debt of the company. Assets distributed to a shareholder on the way out can be taxed as a dividend. Closing is a sequence, not a form.
A workable order
People want the registry form first because it feels like an ending. The ending is the last assessment, not the click.
- List every year from incorporation to now, and mark which T2s were filed.
- List HST and payroll accounts. Close nothing until the returns are in.
- Decide what happens to remaining cash, equipment, and shareholder loans before the final return.
- File the missing years, then the final T2 up to the date of dissolution.
- Ask CRA for a clearance certificate if you want distributions handled in the formal way. Clearance takes time and asks for the filings first.
- Then, and only then, complete the registry dissolution. One late T2 does not dissolve you. A planned dissolution does.
Quote the close as a close
Tax Everyday prepares the missing T2s and the final year. A ready corporate year is $2,000 plus HST. A wind-up with several blank years, an HST account, and assets to distribute is quoted as one job so the registry step is not stranded. Government charges for the dissolution itself are separate and are confirmed before they are paid. They are not buried in the $2,000.
If you might still use the company, say that before we start a wind-up. Catching up a company you will keep is a different quote from burying one.
Short answers
Can I just stop paying the annual return and let it die?+
You can be dissolved for default, and you will not like the timing or the loose ends. Tax, HST, and payroll do not die with the registry status. If you want it closed, close it with the returns filed.
The company never had a bank account. Is closing simple?+
Simpler, not automatic. We still file the years, confirm no HST or payroll account exists, and then dissolve. Bring the articles so we are closing the right entity.
Want this applied to your file?
These notes are general. A return is prepared only after we see your slips.