Best Practices and Common Mistakes to Avoid with Ontario Annual Filings

Even with the best intentions, many Ontario corporations struggle with their annual filing obligations. Some business owners find themselves scrambling at the last minute, while others miss deadlines entirely, often because of simple oversights or misunderstandings.

This guide highlights the most common pitfalls businesses face with their Ontario annual returns and provides practical strategies to ensure your corporation stays compliant year after year.

Common Mistake #1: Confusing Annual Returns with Tax Filings

Perhaps the most frequent misunderstanding stems from the pre-2021 system, when Ontario annual returns were filed alongside corporate tax returns.

What Goes Wrong

Many business owners still believe:

• Their accountant handles the annual return as part of tax preparation
• Filing their T2 corporate tax return satisfies the annual return requirement
• Annual returns are related to financial performance or tax obligations

Since the 2021 changes, this confusion has led countless corporations into default status.

Best Practice Solution

Clearly separate these two obligations in your compliance planning:

• Create distinct calendar entries for tax filings and annual returns
• Have an explicit conversation with your accountant about who’s responsible for annual returns
• Remember that annual returns are due within six months after your fiscal year-end, which may not align with tax deadlines
• Understand that annual returns confirm corporate information, not financial data

If you’re working with professional advisors, obtain written confirmation of exactly which filings they’ll handle and which remain your responsibility.

Common Mistake #2: Missing the Filing Deadline

The six-month post-fiscal-year deadline catches many corporations off guard, especially those accustomed to other compliance timelines.

What Goes Wrong

Businesses frequently miss deadlines because:

• They don’t have a system to track corporate compliance dates
• The responsibility for filing isn’t clearly assigned to anyone
• They confuse the annual return deadline with other corporate deadlines
• They don’t allow enough time to gather required information

Best Practice Solution

Implement a proactive deadline management system:

• Create a corporate compliance calendar marking all key dates
• Set multiple reminders at 90, 60, and 30 days before the deadline
• Assign specific responsibility for completion to a team member or external professional
• Consider filing early rather than waiting until the last minute
• If using the paper filing method, allow extra time for mailing and processing

Many law firms and corporate service providers offer compliance calendar services that automatically track these deadlines for you.

Common Mistake #3: Not Having Proper Access to the Ontario Business Registry

With the launch of the Ontario Business Registry in 2021, many corporations struggle with the technical aspects of filing.

What Goes Wrong

Common access issues include:

• Not having the company key required to access the corporation’s profile
• Losing or forgetting the company key
• Not creating a ServiceOntario account in advance
• Technical difficulties with the online system near filing deadlines

Best Practice Solution

Establish your online access well before filing is due:

• Request your company key immediately if you don’t have it
• Store your company key securely where authorized individuals can access it
• Create and test your ServiceOntario account in advance
• Save login credentials in a secure but accessible location
• Consider authorizing multiple individuals to have access in case of absences

If you anticipate access issues, consider using an authorized service provider who can file on your behalf without requiring your company key.

Common Mistake #4: Submitting Incomplete or Inconsistent Information

The annual return must accurately reflect your corporation’s current information, consistent with what’s already on record with the Ministry.

What Goes Wrong

Returns are frequently rejected because:

• The information doesn’t match what’s currently on file with the Ministry
• Required fields are left incomplete
• Director information is outdated or inconsistent
• The registered office address is invalid (e.g., using a P.O. box)
• The filing attempts to make changes that require a separate Notice of Change

Best Practice Solution

Before filing, verify your current information:

• Obtain a Corporation Profile Report from the Ontario Business Registry
• Compare your records against the official profile
• File any required Notices of Change before submitting your annual return
• Ensure all mandatory fields are completed accurately
• Verify that addresses are complete and conform to Ministry requirements

Remember that the annual return should confirm information already on record, if something has changed, a separate Notice of Change may be required first.

Common Mistake #5: Assuming No Activity Means No Filing

Some corporations incorrectly believe that if they had limited or no business activity, they don’t need to file an annual return.

What Goes Wrong

This misunderstanding leads to default status when:

• Startup companies in pre-revenue stages skip filings
• Corporations winding down operations neglect final returns
• Holding companies with no active business assume they’re exempt
• Seasonal businesses file only in active periods

Best Practice Solution

Remember that all active corporations must file regardless of activity level:

• File annual returns even for dormant or holding companies
• Continue filing until a corporation is officially dissolved
• Maintain compliance during startup phases and wind-down periods
• Include annual returns in your routine even during slow business cycles

If you truly no longer need the corporation, consider formally dissolving it rather than allowing it to fall into default through non-filing.

Common Mistake #6: Not Keeping Proof of Filing

Once the annual return is filed, many corporations fail to maintain adequate records of their compliance.

What Goes Wrong

This lack of documentation creates problems when:

• There’s a dispute about whether filing occurred
• The corporation needs to demonstrate compliance for due diligence
• Directors need to verify their obligations were met
• The corporation changes management or professional advisors

Best Practice Solution

Implement proper record-keeping practices:

• Save confirmation receipts from online filings
• Print or download the confirmation page immediately after submission
• Store a copy of each annual return in your corporate minute book
• Maintain a compliance log showing filing dates and confirmation numbers
• Periodically check your status in the Ontario Business Registry

Ontario law actually requires that a copy of the most recent annual return be kept at the corporation’s registered office, so proper record-keeping isn’t just good practice, it’s a legal requirement.

How Ontario’s Requirements Compare to Other Provinces

Understanding how Ontario’s system differs from other Canadian jurisdictions can help multi-jurisdiction businesses manage their compliance more effectively.

Key Differences to Note

Deadline Structure:

• Ontario: 6 months after fiscal year-end
• Federal: 60 days after incorporation anniversary
• BC & Alberta: 1-2 months after incorporation anniversary
• Quebec: Within first 6 months of calendar year

Government Filing Fees:

• Ontario: No fee for direct filing
• Federal: Approximately $12 (online)
• BC: Approximately $43
• Alberta: No direct government fee, but must file through registry agents

Enforcement Timelines:

• Ontario: No specific grace period; dissolution typically after 1-2 years of non-filing
• Federal: Dissolution after 2 consecutive missed years
• BC: Dissolution after 2 consecutive missed years
• Alberta: Approximately 18 months before dissolution

If your corporation operates in multiple jurisdictions, create a separate compliance tracker for each province’s requirements, as the deadlines and processes vary significantly.

Technological Solutions for Compliance Management

In today’s digital world, technology can significantly simplify the compliance process.

Effective Tools and Approaches

Corporate Record-keeping Software:

• Entity management systems like Diligent Entities, EnAct, or MinuteBox
• Automated compliance calendars with reminder functions
• Secure storage for corporate documents and filing confirmations
• Role-based access for different team members

Calendar Integration:

• Set up recurring reminders in your business calendar system
• Create shared calendar events for compliance deadlines
• Use task management software to assign responsibilities

Professional Services:

• Annual compliance packages from law firms or corporate service providers
• Registered agent services that handle filings across multiple jurisdictions
• Virtual minute book services with compliance monitoring

Many of these solutions are surprisingly affordable, especially when compared to the cost of remedying compliance failures.

Creating a Robust Compliance System

Beyond avoiding common mistakes, implementing a comprehensive compliance system protects your corporation long-term.

Components of an Effective System

1. Annual Compliance Calendar
   • Include all corporate, tax, and regulatory deadlines
   • Account for preparation time needed before each deadline
   • Build in buffer periods for unexpected delays
2. Clear Responsibility Assignment
   • Designate primary and backup individuals for each filing
   • Document the scope of external advisor responsibilities
   • Implement a verification process to confirm completion
3. Regular Corporate Record Reviews
   • Schedule quarterly reviews of corporate information
   • Promptly file Notices of Change when information updates
   • Annually verify that registered details match actual operations
4. Succession Planning for Compliance
   • Ensure multiple people understand filing requirements
   • Document procedures for all routine compliance tasks
   • Create a knowledge transfer protocol for staff changes
5. Integrated Governance Approach
   • Tie compliance reporting to board or management meetings
   • Include compliance status in regular business reviews
   • Treat good corporate governance as a business asset, not just a legal requirement

Expert Support for Your Corporate Compliance

Maintaining perfect compliance with Ontario’s corporate filing requirements can be challenging, especially with recent system changes and the varying requirements across provinces.

Jeffrey Murray Law in Belleville, ON specializes in creating customized corporate compliance solutions for Ontario businesses. Our experienced team can help you:

• Develop a comprehensive compliance calendar tailored to your corporation
• Set up systems to ensure timely filings across all jurisdictions where you operate
• Review your current compliance status and remediate any issues
• Create clear processes for ongoing corporate maintenance
• Provide cost-effective annual compliance packages that give you peace of mind

Don’t risk the consequences of missed filings or compliance mistakes. Contact Jeffrey Murray Law today for professional assistance with all your corporate governance needs and ensure your business maintains its good standing year after year.