The risks in managing your company’s annual filings yourself
Every company must file an annual report with the BC Corporate Registry. For most companies, filing your report by your lawyer is straightforward and routine, but if any deadlines or details are overlooked or missed, the consequences can be expensive.
When you choose to manage your company’s corporate records and filings, you are responsible for ensuring all records and filings are completed and done so properly. You also bear the risk if you do not meet the requirements set out in BC Business Corporations Act.
For instance, when the annual report is not filed within two months of its due date (the company’s incorporation date), the company is not in good standing. This will impact the company’s ability to purchase equipment and vehicles, to borrow money and to enter into contracts.
Further, if the report is not filed for two consecutive years, the BC Corporate Registry will dissolve the company and any company assets will be transferred to the custody, so to speak, of the provincial government. While it is possible to restore a company once it has been dissolved, it can be costly to do so and requires that you file all outstanding annual reports.
In addition to preparing and filing the annual report, the shareholders and directors of every company must undertake certain business by way of unanimous resolutions or meetings.
There are consequences when the directors and shareholders have not done so. For example, all voting shareholders and non-voting shareholders must waive the appointment of an auditor each year. If this is not done, the company is required to appoint an auditor to report on the financial statements of the company. This is a considerable expense for the company. Further, if the shareholders of the company wish to sell their shares in the company, the prospective purchaser will require that all records are complete and up to date, potentially delaying the sale transaction if the records require updating.
When you retain a lawyer or law firm to act as your company’s registered and records office, you can rest assured that your corporate records will be properly maintained, and your annual report will be prepared for signing and filing. HSJ would be happy to work with you to get your records and filings up to date and to act as your company’s registered and records office.