Accounting Requirements for Your Company in Canada

Updated on Monday 15th July 2019

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After starting a company in Canada, the shareholders and the directors are required to comply with various requirements related to the accounting of the business. Among these, the preparation of the financial documents, their approval and the filing with the competent authorities.

It is important to know that the accounting requirements imposed on companies in Canada depend very much on the type of business registered with the Trade Register.

Below, our company formation specialists in Canada explain the most important accounting requirements for businesses. We specialize in offering company registration and accounting services for your business in Canada.
 

Legislation on accounting requirements for companies in Canada


In order to maintain proper accounting for a Canadian company, the company’s officers and the directors are required to respect various laws and regulations. One of the most important accounting laws is the Canada Business Corporations Law which provides for the corporate financial reporting requirements imposed on businesses.

Other laws which must be respected by Canadian companies are the Regulation of Accounting Profession which stipulates that the accounting of a business must be kept by professionals registered with the Chartered Professional Accountants and with the Canadian Public Accountability Board, and the Audit Oversight Arrangements which cover the audit requirements for local companies.

All companies in Canada must respect the International Financial Reporting Standards (IFRS) and the generally accepted accounting principles (GAAP) when filing accounting documents.

Our accountants in Canada can help to respect the accounting requirements imposed at national and regional levels.
 

Corporate records of Canadian companies


All companies in Canada must comply with the regulations imposed by the Accounting Standards Board when it comes to the accounting requirements and which provide among others for business to maintain proper corporate records.

Canadian corporations must keep specific documents at its registered seat, while other documents must be kept in another location chosen by the board of directors.

The following documents must be kept by Canadian businesses:
 
  1. the company’s Memorandum and Articles of Association together with all the amendments brought to them;
  2. all the minutes of the meetings held by the shareholders or other officers in the company;
  3. a register of the directors where all the details of the company’s directors and members of the board of directors are recorded;
  4. a register of the company’s officers which must contain information on all the officers in the company;
  5. a register of the company’s members or shareholders which must provide information on all the participants in a company;
  6. the company’s accounting records which must be duly prepared, among these the financial statements.

It is important to know that the accounting records must be prepared by the directors and must be disclosed to the shareholders during the annual general meeting. In order to be filed with the Canadian Revenue Agency, the accounting records must be approved by the shareholders.

If you want to open a company in Canada and need information on the accounting requirements it must comply with, our local consultants can inform you.
 

Accounting documents to be maintained by companies in Canada


There are various accounting requirements which need to be respected by Canadian companies. Among these, a business must keep and file specific documents with the relevant authorities in Canada.

The following accounting documents must be recorded by companies in Canada:
 
  • the balance sheet of the company which must comprise information on its annual earnings;
  • the profits and loss account which must provide information on the profits and losses registered by a company in the previous financial year;
  • a statement of retained earnings and a cash flow statement must also be submitted with the Revenue Agency;
  • various tax returns, such as T2 form and the Goods and Services Tax return, depending on the business form.

If you decide to open a company in Canada, you should know that:
 
  • in May 2019, Canada’s trading balance registered as a surplus of 0.76 billion CAD;
  • the surplus came from increased exports of motor vehicles (4.6% growth);
  • Canadian imports also grew in May 2019 by 1%;
  • exports to the USA registered an all-time high of 39.3 billion CAD in May.

For complete information on how setting up a company in Canada and assistance in complying with the accounting requirements imposed by the local authorities, please contact our company registration representatives.