Certificate of Status (Ontario)

A certificate of status is the Ontario government's formal confirmation of where a corporation stands on the public record. It identifies the corporation and certifies its status as of the date it is issued.

The certificate is one of the Ontario Business Registry's search products. You can order it online from the ministry, through an intermediary or licensed service provider, or by mail. Under the Business Corporations Act (OBCA), a certificate the Director issues as to any fact must be signed by the Director or a designated public servant, and section 265.3 makes it proof of the facts it certifies, in the absence of evidence to the contrary, without anyone having to prove the signature. That evidentiary weight is why lenders, land registry offices and opposing counsel accept it.

Certificate of good standing is not a separate Ontario product. It is the name lenders and out-of-province counsel often use for the same document. A federal corporation under the Canada Business Corporations Act gets the equivalent from Corporations Canada: a certificate of compliance, which confirms that the corporation exists, has made its annual filings and has paid its fees. Corporations Canada refuses to issue one if any of those is outstanding.

The certificate answers one question: does this corporation exist on the Ontario record, and in what status? For a closing, that means the corporation you are dealing with has not been dissolved or cancelled. A buyer, lender or landlord relies on it to confirm that the counterparty is a live legal person that can sign contracts, own property and be sued. A dissolved corporation cannot do those things, and its remaining property can forfeit to the Crown, so a deal signed with one is in serious trouble.

What the certificate does not prove matters as much:

• Tax compliance. It says nothing about CRA or Ontario tax filings, payroll remittances or HST. Those need separate searches, representations and indemnities.
• Clear title to assets. Lenders' security interests show up in a PPSA search, not on the certificate.
• Ownership and authority. It does not show who owns the shares or who may sign. That comes from the corporate minute book, the securities register and an officer's incumbency certificate.
• The governing rules. It does not reproduce the articles, by-laws or any unanimous shareholder agreement; buyers review those constating documents separately.
• Anything after its date. A certificate issued three weeks ago proves nothing about today.

The registry sells two products that people confuse. Both issue immediately when ordered online.

Read them together. Ontario's profile report guide lists statuses in which a corporation is still active but in a cancellation or default process, for example for default under the Corporations Information Act or a Ministry of Finance tax statute. Under section 241 of the OBCA, the Director can give notice that the corporation will be dissolved unless it cures a missed Corporations Information Act filing or an unpaid fee within 90 days, and can then dissolve it by order.

Ontario corporations must file an annual return through the registry within six months after their fiscal year end. Unfiled returns are the most common reason a target that looks active is closer to dissolution than the seller realizes. Our corporate compliance checklist covers the annual filings that keep a corporation off that path.

A certificate of status appears on almost every Ontario closing agenda: for the target in a share purchase, for the seller in an asset purchase, and for each borrower and guarantor in a financing. A share purchase agreement usually lists it among the seller's closing deliverables, and lenders make it a condition of funding.

Freshness is the main negotiating point. Because the certificate speaks only as of its date, agreements commonly require one dated no earlier than a business day or two before closing, and many closing teams simply order it on closing morning. It is cheap and quick, so there is little reason to accept a stale one.

Pull it twice. Order a certificate and a profile report at the letter of intent stage, as part of due diligence, so a default flag or a dissolution surfaces while there is time to cure it. A dissolved corporation must be revived before it can close, which our guide to reviving a corporation explains. Lamba Law's free due diligence checklist includes the registry search among its corporate items.

The certificate sits alongside the other government documents collected at closing: a section 116 certificate when a seller is not resident in Canada, a WSIB clearance certificate, the HST section 167 election in an asset sale and, for a foreign buyer, an Investment Canada Act notification.

Daniela Moreau is buying all the shares of Credit Valley Fabrication Ltd., an Oakville metal shop, for $2,100,000. At the letter of intent stage her lawyer orders a certificate of status and a profile report for $34 in government fees. The corporation shows as active, but the profile report shows it in a cancellation process for default under the Corporations Information Act. The seller, Raj Malhotra, had not filed annual returns for three years after his bookkeeper retired.

Because the Director can dissolve a defaulting corporation once a 90-day notice under section 241 runs out, Daniela's lawyer makes filing the missing returns a condition of signing and adds a representation that the corporation is not in default of any filing. Raj's accountant files the three returns through the registry within a week, and a new profile report shows the default cleared.

The share purchase agreement requires a certificate of status dated no earlier than the business day before closing. Daniela's lawyer orders it at 9 a.m. on closing day, it shows the corporation active, and the deal closes that afternoon. Had nobody checked until closing week, the dissolution notice could have derailed the timetable.