If you intend to start a business in Canada, you need to know the record retention requirements that are essential for the country. Record retention requirements are the list of records that need to be maintained and submitted to the government authorities from time to time to keep the business running legally. Since there are many formalities to be met with in maintaining these records, it is usually outsourced to an experienced and competent offshore data entry services provider. Documents such as property deeds, invoices, contracts, income and expense statements with proofs, sales journal etc are some of the basic records every business is required to keep. Here are the certain important details you need to know about record retention requirements for businesses in Canada:
All businesses should maintain a journal of all the expenses and income they make while they are actively doing the business. A complete database of the business records in terms of every aspect of the business such as accounting, property deeds, licensing papers, registration details, labor requirements, tax returns filed etc should be well-maintained and updated. While some of these need to be maintained on paper, the others can be maintained electronically. Those records being maintained electronically should be compatible with the CRA software. A competent offshore data management service provider will help you with creating, inputting and maintaining these records electronically in the desired format. They will also ensure data privacy and backups so that you will not lose any valuable information in the event of a security lapse or device failure. The Canadian authorities require all business to maintain the records electronically or otherwise and submit them for audit and inspection along with all necessary supporting documents.
For different types of documents, there’s a different rule that applies which regards to how long it should be maintained. A competent Document Management Services provider will be familiar with these rules applicable for Canada. All records in electronic form must be in a format readable or accessible by the CRA software.
- The licensing records should be maintained for as long as they are valid
- The registrations also should be maintained till they are valid
- The income tax returns need to be maintained for at least 6 years in case the CRA needs to review the same.
- You have to maintain the records of the tax objection or appeal raised by you until it is completely resolved/absolved
- If the company wants to dispose the records before the end of six years, they have to fill a T137 form and get it approved by the CRA authorities.
- In case, the records are lost due to some natural calamity or theft, the CRA has to verify the business’ claim for loss of records.
- Even if you are closing the business, you need to maintain the records for 6 years if you are not incorporated. Otherwise, you have to maintain it for a minimum 2 years from the date of dissolution.
Even though a minimum of 6 years is suggested to maintain the records, sometimes the CRA may require you to keep them longer. So business outsourcing services advices the businesses to maintain the records a couple of years more than that.