In Ontario, Canada, dissolving a corporation can be a challenging procedure. It’s critical to comprehend the procedures and requirements needed to dissolve a company legally. For instance, in Canada in 2020, 12,821 corporations were dissolved.
What’s the process?
Even though an Ontario-based corporation may stop doing business and become inactive, the Articles of Incorporation are still in effect until the corporation is formally dissolved. The business must abide by all tax laws in Ontario in order to be granted permission to dissolve. The Ministry of Government and Consumer Services will reject the request for dissolution if there is any unpaid tax money.
An application must first be made to the Ministry of Finance requesting approval in order to dissolve an Ontario corporation. A letter requesting a Letter of Consent to Dissolve Corporation must be sent by the corporation to the Ministry of Finance’s Client Services Branch. The full corporate name, the Ontario incorporation number, and the federal Business Number must all be included in the request. An authorised director of the corporation must sign the request.
The corporation has 60 days to submit its application for dissolution to the Ministry of Government and Consumer Services after receiving the Ministry of Finance’s consent to dissolve. The Companies and Personal Property Security Branch, 393 University Avenue, Suite 200, Toronto, Ontario, M5G 2M2, is where the request for dissolution should be mailed. It must contain:
- The Letter of Consent to Dissolve Corporation.
- Two sets of Articles of Dissolution with original signatures (blank articles available online).
- A government fee made payable to the Minister of Finance.
- If desired, you can also include the ServiceOntario Acknowledgement we have Received your Application Form, which allows you to provide the Ministry with an email address in order for them to confirm receipt of your request (this form is available online).
- A covering letter providing a contact name, return address and telephone number.
On the brand-new Ontario Business Registry, applications may now also be submitted online. The Ministry will send you a copy of the Articles of Dissolution certified with their stamp and the dissolution date after approving your request. The certification date constitutes the corporation’s official dissolution date.
What happens when a corporation is dissolved?
A corporation is dissolved, and at that point it is no longer. It follows that the business will no longer be subject to any obligations or rights under the law.
All assets of the Company shall be distributed in accordance with the provisions of the Articles of Dissolution or the order of the Court. Prior to the distribution of the assets, any outstanding liabilities and debts must be settled. The name of the company will be struck from all government records once it has been dissolved, making it unusable by anyone.
A corporation’s dissolution is a significant decision that shouldn’t be rushed. Numerous things need to be taken into account, including price, time commitment, and asset distribution.
Before taking any steps to dissolve a corporation, it is crucial to consult a lawyer. KPA Lawyers would be delighted to help you with this process and respond to any questions you may have.