Information on the resources, guides, and legal tips relating to the closure of a business, and help to avoid closing.
Across Canada, many entrepreneurs have faced the difficult decision to pause or close their business, due to the impact of COVID-19. In this tremendously challenging period, business owners are not alone.
At the start of the pandemic, some businesses, such as personal services, were subject to Government of British Columbia closure orders. Thanks to the efforts made across British Columbia, we have moved to Phase 3 of our provincial Restart Plan, allowing for travel across our province, and more industries to reopen.
On this page:
- Programs to Help Your Business
- Reopening Your Business
- How to Close/Dissolve Your Business
- Liquidation and Bankruptcy
Programs to Help Your Business
The Government of Canada has introduced a number of supports to help prevent small businesses from closing and protect against bankruptcy due to COVID-19. These include:
- Business Credit Availability Program (BCAP)
- Canada Emergency Wage Subsidy (CEWS)
- Expanded Work Sharing Program
- Canadian Emergency Business Account (CEBA)
- Canada Emergency Commercial Rent Assistance (CECRA)
If you have no choice but to cease business operations, please refer to the Small Business BC article on How to Exit a Business: Your Legal Requirements for advice and guidance.
Reopening Your Business
Starting in mid-May the B.C. government began taking a careful, phased approach to restarting the B.C. economy in the face of COVID-19. The BC Restart Plan outlines each of the four phases, which businesses are able to open and when, and what’s expected of businesses and individuals as we move through the phases.
As part of the Restart Plan, businesses must develop and communicate a COVID-19 Safety Plan for safe reopening. WorkSafeBC has created safe reopening guidelines, including industry-specific guidelines.
Learn more about reopening your business.
My business is currently unoccupied. Will this have an impact on my insurance?
Some insurers will have clauses that stipulate if a business is not occupied for 30 days their insurance coverage may be impacted. However, given the unique circumstances presented by COVID-19 and the need for physical distancing, many insurers are working with clients to accommodate their needs.
If you are concerned about this situation you are strongly encouraged to speak to your insurer for details about your specific coverage and how it is affected by COVID-19.
How to Close/Dissolve Your Business
If you’ve registered your business and you decide to close it, you’ll have to file a dissolution notice with the Corporate Registry. The form you fill out and the associated costs will depend on your business type. See below for details.
Proprietorship: For a proprietorship, you will need to complete the Dissolution or Change of Proprietorship Registration form. Sections A, B, C (including registration number), D and H must be filled out (in duplicate), and the form must be mailed directly to the Corporate Registry. There is no cost to dissolve a sole proprietorship.
Partnership: For a partnership, you will need to complete the Dissolution or Change of Partnership Registration form. Sections A, B, C (including registration number), D and H must be filled out (in duplicate) and the form must be mailed directly to the Corporate Registry. There is no cost to dissolve a partnership.
Corporation: For a corporation, you must file an Application for (Voluntary) Dissolution. This application must be submitted online, and the cost is $20. Once completed, you must also contact the Canada Revenue Agency to close your Corporate Tax Account (proof of dissolution must be provided). You will also have to file a final corporate tax return for the corporation.
- How to Exit Your Business: Your Legal Requirements
- How to Exit Your Business: The Financial Implications
Liquidation and Bankruptcy
Bankruptcy should be considered only as a last resort, after you have exhausted all means to keep your business afloat and pay all your creditors.
Although declaring bankruptcy can feel like a failure, it can also provide relief.
When you’re in bankruptcy, no unsecured creditor can garnishee your wages or initiate any other collection action against you. However, your secured creditors can repossess any property or collateral you had secured against a loan, such as your car or house.
You also have to pay any taxes outstanding to Canada Revenue Agency. Bankruptcy does not affect the liability of someone who guaranteed or co-signed a loan on your behalf.
If you need to declare bankruptcy, you must contact a trustee in bankruptcy, an individual licensed by the Office of the Superintendent of Bankruptcy to administer the bankruptcy process. A trustee will:
- Discuss your situation and your options
- Complete the required forms
- File the bankruptcy with the Office of the Superintendent of Bankruptcy
- Sell your assets
- Notify your creditors of the bankruptcy
- Prepare a report to the Superintendent of Bankruptcy describing your actions during the bankruptcy
Visit the Office of the Superintendent of Bankruptcy website for more information. You can find a trustee in the business pages directory in your phonebook.