In Ontario, as in many other provinces, businesses are subject to annual information filing requirements mandated by the Corporations Information Act. These obligations affect a wide range of businesses, including dental practices and individual dentists who operate their own practices. A dentistry professional corporation must comply with these requirements; this is crucial to maintain legal and financial standing, and it helps to ensure transparency and accountability in the corporate sector.
Ontario dentists and dental practice owners with an incorporated business model should be aware of changes in filing annual returns. Previously, corporations could submit their annual return alongside their corporate tax return to the Canada Revenue Agency. However, starting from May 15, 2021, corporations are now required to follow a different filing procedure.
Annual Information Filing Requirements
The Corporations Information Act establishes the framework for annual information filing obligations. Dental practice owners and individual dentists who operate their practices as corporations need to comply, or they may be subject to fines and penalties.
The annual information filing requirements under the Corporations Information Act are designed to enhance transparency and accountability. This ensures that dental practices are operating in compliance with provincial laws and regulations. Dentists and practice owners must provide accurate and up-to-date information about their businesses, including financial statements, shareholder information, and other corporate details.
When filing an Ontario annual return directly through the Ontario Business Registry, dental practice owners should ensure that they have the necessary documentation and information readily available. The process involves providing accurate data, reviewing the information for completeness, and submitting the required forms and fees within six months of the company’s fiscal year-end.
Documentation
Dental practice owners are typically required to submit financial statements as part of their annual filing, including balance sheets, income statements, and cash flow statements. Financial statements provide an overview of the business’s financial health and performance during the previous fiscal year. Accuracy and compliance with accounting standards are crucial to ensure the credibility of these statements.
Dentists who have incorporated their practices need to provide details about the shareholders of the corporation. This includes the names, addresses, and the number of shares held by each shareholder. If there have been any changes in the corporate structure during the previous fiscal year, such as new shareholders or changes in ownership, these changes must be reported.
Dental practice owners must also complete and submit an annual return form detailing essential information about the corporation, including its registered office address, directors, officers, and shareholders.
There are associated filing fees for submitting the annual return and related documents.
An incorporated dental practice must also submit a Certificate of Authorization from the Royal College of Dental Surgeons of Ontario (RCDSO). This is proof the dental business may operate within the province of Ontario and authorizes owners to provide dental care to the public and establish and run dental practices.
Importance of Compliance
Maintaining Corporate Status
For dental practice owners who have incorporated their practices, compliance with annual information filing requirements is essential to maintain their corporate status. A corporation that loses its status may be subject to additional taxes, administrative burdens, and potential liability issues.
Access to Financing
Dentists and dental practice owners may need to secure financing for various purposes, such as expanding their practice, purchasing equipment, or hiring additional staff. Lenders often require businesses to demonstrate their financial stability and compliance with legal requirements. Complying with annual information filings can help maintain a good standing, making it easier to access financing.
Transparency for Stakeholders
Stakeholders, including shareholders and investors, rely on the information provided through annual filings to assess the financial health and performance of a dental practice. Accurate and timely submissions enhance transparency, instilling trust and confidence in the business.
Changes to the Annual Information Filing Process
A significant change in how the Canada Revenue Agency (CRA) handles annual returns for Ontario corporations took effect on May 15, 2021. Before, the CRA used to do this on behalf of the Ministry of Public and Business Service Delivery, but this has changed. Now, the annual return isn’t part of your corporate tax return. You need to file it separately, either by yourself or with your accountant.
If your incorporated dental practice was supposed to file an annual return between May 15, 2021, and October 18, 2021, you don’t have to do it for 2021, but from now on, you need to file your Ontario annual return directly through the Ontario Business Registry.
Ontario Business Registry
The Ontario Business Registry offers a convenient online platform for businesses and not-for-profit corporations, allowing them to complete over 90 different transactions with ease. These transactions include tasks like registering, incorporating, updating information, as well as filing your annual information return for your dental practice.
https://depositphotos.com/photo/important-documents-placed-desk-office-221048690.html
What Are My Options to File Annual Returns?
You can file your dental practice’s Ontario annual information return yourself, or you can authorize your accountant to do it for you.
Do It Yourself
You have the option to file your annual return yourself using the free services provided by the Ontario Business Registry. As of now, the Ontario Ministry has not enforced any requirements for annual filings or imposed penalties. However, it’s advisable for Ontario corporation owners to register and file their annual returns promptly to avoid any potential penalties.
To file your annual returns, you’ll need a unique company key. This key allows you access to the Ontario Business Ministry’s website for filing purposes.
For Ontario corporations that were incorporated before October 19, 2021, you must request a company key from the Ontario ministry. Businesses that incorporated after that date would have received the company key along with the incorporation documents via your email on file with the Ontario Business Registry or your physical business address. If your business address has changed from what you had on file, you’ll need to answer security questions before a new company key can be emailed to you.
You can also locate your company key or request a new one on the Ontario Business Registry website.
Using your company key, you can log in with a ONe-key ID after you have created a Service Ontario account and signed up for it. This electronic credential provides secure access to government services, including the Ontario Business Registry, which is necessary for filing annual information returns.
If you forget your password and recovery questions and the email address on file isn’t correct, you will need to create a new ONe-key ID.
It’s your responsibility to ensure that your corporation’s information is accurate and current with the Ontario Business Registry.
Let a Professional File Your Annual Return
You can pay a legal or accounting firm to be your intermediary and provide this service to you, handling your annual returns for you. You need to authorize this intermediary to transact on your behalf. You can do this through the Ontario Business Registry’s Partner Portal. This enables them to make transactions on your behalf.
You may choose to instead delegate the task of filing your annual returns to a professional, such as an accountant, lawyer, or other trusted entity that is qualified to provide this service. You’ll need to grant them authorization to conduct transactions on your behalf through the Ontario Business Registry’s Partner Portal. This authorization empowers them to perform these transactions on your behalf.
Even if you choose this option, you still need to obtain your company key on your own. Once you have it, provide it to your accountant or lawyer. This key is essential for them to access the necessary information and complete the annual return filing process.
Learn More
You can find more details about the process and requirements from the Ontario government website.
DentalTax’s team of highly skilled accounting specialists are experts at helping dental practice owners and dentists. We can answer all of your questions about filing annual information returns, and can take care of your filing requirements for you, ensuring you stay compliant.
We can also help you with other aspects of your business’s finance and accounting, helping you minimize your tax liability and find other opportunities to boost your finances.
Adam has an MBA from the Richard Ivey School of Business in London and also holds a Chartered Investment Manager designation.
- Maximizing Tax Deductions for Dental Practices - April 1, 2024
- Tax-Efficient Investing For Dentists - March 28, 2024
- 2024 Tax Insights: Key Changes Every Dentist Needs to Know - March 6, 2024
