Windups and Liquidation
Dissolution is the ending of a Corporation, either voluntarily or involuntarily. When a corporation is dissolved, it ceases to exist legally. To apply for dissolution, a corporation must first stop doing business.
An Ontario Business Corporation or Canadian Business Corporation can apply to dissolve when it has no property or liabilities. There are some differences between provincially and federally incorporated companies. As such, the following is only an overview.
If a corporation has assets, it must transfer its remaining assets to its shareholders or turn the remaining assets into cash and distribute the money to shareholders before dissolving.
If a corporation has debts or is involved in ongoing litigation, it must first pay its debts or settle any legal proceedings before it can be dissolved.
You will need to obtain an Ontario tax clearance certificate for Ontario companies confirming all applicable taxes have been paid before you can apply for dissolution.
Someone should retain the corporate minute book, corporation records, proof of dissolution for a minimum of 6 years or until all applicable tax re-assessment periods have expired in longer than 6 years.
Once a corporation has no assets or debts, it can proceed to fill out and file the necessary government forms. Upon confirmation of dissolution, a Certificate of Dissolution is issued.
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