How to Dissolve a Canadian Corporation
Dissolving a Canadian corporation can be a complex process, but it is an essential step for businesses that have ceased operations or have become defunct. This article provides a comprehensive guide on how to dissolve a Canadian corporation, ensuring that the process is carried out legally and efficiently.
Understanding the Process
The process of dissolving a Canadian corporation involves several key steps, including notifying the appropriate government agencies, winding up the corporation’s affairs, and finally, applying for the corporation’s deregistration. It is crucial to follow these steps meticulously to avoid any legal repercussions and to ensure a smooth dissolution process.
Step 1: Obtain an Original Certificate of Incorporation
Before beginning the dissolution process, you must obtain an original certificate of incorporation. This document is essential for proving the corporation’s legal existence and for completing the dissolution process.
Step 2: Conduct a Shareholder Meeting
The first step in the dissolution process is to hold a shareholder meeting. During this meeting, shareholders must vote to pass a resolution to dissolve the corporation. This resolution should be documented in the minutes of the meeting.
Step 3: Appoint a Liquidator
Once the resolution to dissolve the corporation has been passed, you must appoint a liquidator. The liquidator is responsible for winding up the corporation’s affairs, including selling off assets, paying off debts, and distributing any remaining assets to shareholders.
Step 4: File a Notice of Intention to Dissolve
After appointing a liquidator, you must file a Notice of Intention to Dissolve with the provincial or territorial government where the corporation was incorporated. This notice must be filed within 15 days of the shareholder meeting.
Step 5: Winding Up the Corporation’s Affairs
The liquidator must now take steps to wind up the corporation’s affairs. This includes:
– Selling off assets to pay off debts and liabilities
– Distributing any remaining assets to shareholders
– Paying any dividends or bonuses
– Closing all bank accounts and credit card accounts
– Disposing of any equipment or property
Step 6: File a Final Return
Once the corporation’s affairs have been wound up, the liquidator must file a final return with the Canada Revenue Agency (CRA). This return must be filed within six months of the date the corporation ceased operations.
Step 7: Apply for Deregistration
The final step in dissolving a Canadian corporation is to apply for deregistration. This application must be submitted to the provincial or territorial government where the corporation was incorporated. Once the application is approved, the corporation will be officially deregistered and cease to exist as a legal entity.
Conclusion
Dissolving a Canadian corporation requires careful planning and attention to detail. By following the steps outlined in this article, you can ensure that the dissolution process is carried out legally and efficiently. Remember to consult with a legal professional if you have any questions or concerns during the process.
