Before you pay out the money, know what you could still owe.

Directors can be personally liable for certain unpaid CRA amounts. See where you stand before you close, and what to ask your accountant first.

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Three things to check first

Before any money goes to shareholders.

Every CRA account you hold: payroll, GST/HST and corporate tax
Whether balances are paid and returns are filed
Who reviews the plan before any distribution: your accountant or lawyer

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Information for professional review, not legal or tax advice.

In plain language

Why closing the company doesn't close the risk.

Payroll deductions and sales tax

If a company does not remit payroll deductions or GST/HST, CRA can look to its directors. This can still apply after the company is dissolved, generally for a limited time after you stop being a director.

Source: CRA / Income Tax Act s.227.1; Excise Tax Act s.323

Clearance certificates

A clearance certificate confirms that CRA has no outstanding claims before assets are distributed. Paying shareholders before it is issued can leave the person who distributed personally liable, up to the value paid out.

Source: CRA: clearance certificates

Timing

CRA aims to acknowledge a request within 45 days and assess within 120 days, so it can take months. Limitation periods and the order of steps matter.

Source: CRA

What to do next

A simple three-step checklist.

List every CRA account

Payroll (RP), GST/HST (RT) and corporate income tax (RC), plus any provincial accounts.

Check balances and filings

Ask your accountant to confirm what is owed, what is filed, and what is missing.

Decide who reviews before any payout

Your accountant or lawyer should sign off before money goes to shareholders.

Talk to a professional first if

You are behind on payroll or HST, or creditors are calling.

A licensed insolvency trustee offers consultations and can explain your options, including proposals and bankruptcy. We can show you how to find one. CloseMyBusiness.ca does not provide insolvency advice and receives no fees for referrals.

Run the free check first

Questions

Straight answers.

Am I personally liable?

It depends on your facts, which is why your accountant or lawyer should confirm. The free check shows the flags that apply to your situation.

Can I still pay myself before I close?

Check with your accountant first. Distributing before CRA issues a clearance certificate can expose you personally.

Do you give legal or tax advice?

No. We provide information and prepared documents for professional review, and coordinate with your own accountant and lawyer.

What does it cost?

The Closure Options Check is free. Kits start at $199, and a consultant can take on the whole closing from $1,999.

Not sure where you stand?

Start the free Closure Options Check. It flags what to look at before you close.

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