How do I check a corporation’s good standing before buying a business?

There is no single national certificate of good standing. A corporation exists under one statute, federal or provincial, and the registry for that statute is the authority on whether it is current. Checking takes minutes and is one of the cheapest steps in a share purchase, yet it is often left to the day before closing.

Start with the registry that governs the company

Search for the corporation by name and note whether it is federal, administered by Corporations Canada, or provincial. Corporations Canada lets you search for a federal corporation to see whether its annual return is due. British Columbia’s registry offers an online business and person search, where you can obtain business summaries, filings and Certificates of Good Standing.

What the annual filings tell you

Every federal corporation must file an annual return each year, and Corporations Canada says filing it avoids potential administrative dissolution. Quebec requires every enterprise on its register to file an annual updating declaration, even when nothing has changed. A gap in these filings is worth asking the seller about before you go further.

Certificates and their limits

In British Columbia a Certificate of Status verifies that a company is active in the province. The registry cannot issue one for an extraprovincial company, because it does not know that company’s status in the place it was incorporated. For a business incorporated elsewhere, search the registry of that jurisdiction as well.

If something has lapsed

Alberta’s registry publishes forms to revive a dissolved corporation, including an annual return for each year not submitted before and after dissolution, so a lapse can be repaired. Ask the seller to cure it before closing, and ask your lawyer to repeat the search close to the closing date. A bring-down certificate is one way the agreement can confirm nothing has changed in the meantime.