Why is it Important to File Annual Reports for a Company or a Society?
If a company or a society fails to file annual reports for two consecutive years, it is in danger of being struck from the registry or “dissolved”. This is kind of like the company or society being issued a death certificate. Assets of the company or society can be forfeited to the government. It should be noted, however, that any liability generally continues for each director, officer, shareholder and liquidator of a company that is dissolved.
If a company or society has been struck, it is possible to have it restored by the registrar. The cost of restoration is often more expensive than if the company or society had paid to have a law firm act as the registered and records office.
It is important to note that merely filing an annual report does not keep a company or society in good standing. A common mistake for people who file their own annual reports is the assumption that no other documentation is required. A company, for example, must keep a record of annual directors and shareholders meetings and a society is required to conduct and record an annual general meeting.
This article is for general information only, and should not be relied on as legal advice in any particular case. Consult a lawyer for advice on your case.
by Rod Mont