What tax work remains when I close my sole proprietorship?

Arsen Accounting Services · Question 140 · Sources checked October 29, 2026

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Closing the doors does not close the tax record. You still need to calculate the final business income or loss, deal with remaining assets and inventory, and review each CRA program account used by the business.

Account for what remains

A sole proprietor reports business results through the personal return. Selling assets can create capital gains, recapture, or other adjustments. Taking business property for personal use can also require tax review. Keep the final transactions separate from ordinary expenses.

If you are GST/HST-registered, cancelling registration has its own rules for property held at cancellation and the final return. Payroll obligations, if any, also need to be completed independently.

Official guidance: [1], [2], [3], [4].

Create a closure reconciliation

For example, a retailer stops trading but still has stock, unpaid customer invoices, supplier bills, and a vehicle. A zero sales figure after the closing date does not resolve those balances. List how each item will be collected, paid, sold, retained, or written off.

Prepare the closure package

• Final trading date and bank reconciliation.
• Inventory and asset lists, with sale or transfer details.
• Outstanding invoices, bills, deposits, and refunds.
• GST/HST and payroll account details and filing history.

Keep records after closure; cancelling a registration does not eliminate the need to support earlier returns. Before distributing all remaining cash to yourself, estimate final tax and account balances. Ask your preparer to identify which accounts require a closure request, which returns remain outstanding, and what confirmations you should retain when the process is complete.