Certificates of Compliance for Federal Companies

Federal Certificates of Compliance are issued by the federal government for federal companies. Sometimes these are called Certificates of Good Standing or Certificates of Status and all companies registered in all jurisdictions in Canada. It does not matter what country a company is incorporated in, the government will be able to provide a Certificate of Status for any company. However, in the federal jurisdiction they are called Certificates of Compliance.

Basically a Certificate of Compliance is required when you need to provide someone or some other company with the assurance that your federal company is in good standing.

Being in good standing means that the company is still active and has not been dissolved for non-filing of federal and/or provincial tax returns or non-filing of federal annual returns pursuant to the requirements of the federal statutes.

The Certificate of Compliance for a federal company will provide the accurate current name of the federal company, the federal corporate number and its status.

Federal companies must file federal tax returns each year and if those returns are not filed for a number of years the federal government will dissolve the company. If your address is current on file you will be provided with warning from the Revenue Canada Agency that tax returns are due. As well, federal companies must file federal annual returns each year and if those returns are not filed for 2 years the company will be dissolved.

It is very expensive to revive a company and the federal government puts the onus on the owners of federal companies to follow the statute requirements. It will not remind you that you have not filed your federal annual returns. Any reputable Canadian search house will be able to check for you to see that your annual returns have been filed and there should not be a cost for this. If it is determined that you need to file annual returns this can be done fairly quickly by a search house and then a favourable Certificate of Compliance can be issued.

If you have been requested to provide a Certificate of Compliance for your federal company it is a good idea to first check to see if all federal annual returns have been filed. Otherwise, you will be wasting your money. The government does not refund the money if the Certificate of Compliance cannot be issued.

A Certificate of Compliance is not a federal corporate search. If you are trying to determine information about a federal company you should have a federal company search done rather than ordering a Certificate of Compliance.

Certificates of Compliance are sometimes required by banks, law firms, individuals on the other side of a corporate deal whereby you may be selling your company, when buying property through your business, when registering a vehicle against the company, etc. Any person or company that your federal company is dealing with may ask you to provide them with a Certificate of Compliance to ensure your company is in good standing with the federal government. Knowing this in advance will save you money and problems.

Holly Crosgrey is the owner of Resources for Canadian Business Owners located at www.canadianbusinessresources.ca