The purpose of this SOP is to provide guidance on the process for ceasing activities with Revenu Quebec. Cessation of activities refers to the termination or closure of a business or professional activity in the province of Quebec, Canada.
Scope:
This SOP applies to all individuals and businesses registered with Revenu Quebec who wish to cease their activities and comply with the necessary requirements for doing so.
Prerequisites:
- Obtain the necessary information regarding the cessation of business
- Ensure availability of an authorized person with signing authority to complete the appropriate form(s)
Form(s) must be signed by the individual (in the case of an individual in business)
or by one of the following people:
- a member of a partnership
- a trustee of a trust
- a director (president, vice-president, secretary or treasurer) of a corporation
- an authorized person
A corporation can authorize a person to represent it by providing a resolution of the board of directors or a unanimous shareholder agreement, as applicable, that authorizes the person to sign this form on its behalf. In other cases (for example, an individual or a partnership), the business can authorize a person to represent it by providing a power or attorney or filing form MR-69-V, Power of Attorney, Authorization to Communicate Information, or Revocation (on which the business must specify that the person is authorized to sign this form on its behalf).
Procedure:
Notify Revenu Quebec:
The first step in the cessation of activities process is to notify Revenu Quebec of your intent to cease operations. This can be done by completing and submitting the appropriate form, which is available on the Revenu Quebec website.
- Source deductions and employer contributions – Form LM-1.A-V
- Consumption taxes – Form LM-1.A-V or LM-4-V
- Income tax – Corporations – Form LM-1.A-V
Once the applicable form(s) have been completed and signed, mail the form(s) it to one of the following addresses:
- 3800, rue de Marly, Québec (Québec) G1X 4A5
- P. 3000, succursale Place-Desjardins, Montréal (Québec) H5B 1A4
Finalize Tax Obligations:
Before ceasing activities, it is important to ensure that all tax obligations with Revenu Quebec are met. This includes filing any outstanding tax returns and paying any outstanding taxes, penalties, or interest.
Below are the filing deadlines for your source deductions-related documents.
Cancel Business Number:
If you have a business number assigned by Revenu Quebec, it is necessary to cancel this number once all tax obligations have been met. This can be done by completing the appropriate form and submitting it to Revenu Quebec.
Inform Other Government Agencies:
In addition to notifying Revenu Quebec, it may be necessary to inform other government agencies of your cessation of activities. This can include the federal tax authority (Canada Revenue Agency), provincial licensing boards, and municipal authorities. Consult with the relevant agencies to determine any additional steps that need to be taken.
Dispose of Business Assets:
If you have any remaining business assets that are no longer needed, it is important to determine the appropriate method of disposal. This could include selling assets, transferring them to another entity, or disposing of them in accordance with applicable laws and regulations.
Notify Employees and Clients:
If you have employees or clients, it is important to notify them of your intention to cease activities. This will allow them to make any necessary arrangements and ensure a smooth transition. Provide clear and timely communication to minimize any potential disruptions.
Maintain Record:
Even after ceasing activities, it is important to maintain records for a specified period of time as required by law. This includes financial records, contracts, and other relevant documents. Consult with a legal professional to determine the specific record retention requirements for your business or profession.
Seek Professional Advice:
Throughout the cessation of activities process, it is strongly recommended to seek professional advice from tax professionals, lawyers, or consultants who specialize in business closures. They can provide guidance tailored to your specific situation and ensure that all legal and regulatory requirements are met.
Conclusion:
By following this SOP, individuals and businesses registered with Revenu Quebec can effectively and compliantly cease their activities in the province. It is important to carefully follow each step and seek professional advice when necessary to ensure a smooth transition and avoid any potential issues.
Resources:
Revenu Quebec
Forms:
Source deductions and employer contributions – Form LM-1.A
Consumption taxes – Form LM-1.A-V, or Form LM-4-V
Income tax – Corporations – Form LM-1.A-V
Power of Attorney, Authorization to Communicate Information, or Revocation - Form MR-69-V