Guide on dissolving a cooperative

Learn how to prepare a request to dissolve a cooperative under the Canada Cooperatives Act (Coop Act).

On this page

• Effect of dissolution on a cooperative
• Requirements for dissolving a cooperative
• Approval of the dissolution of a cooperative
• Dissolving a cooperative that owns properties or has liabilities
• Documents to file to dissolve or provide notice to dissolve a cooperative
• Reversing a decision to dissolve after a Certificate of Intent to Dissolve is issued
• Bankrupt and insolvent cooperatives

Effect of dissolution on a cooperative

Dissolution is the legal termination of a cooperative. In other words, dissolution is the act of ending the existence of a cooperative. A cooperative is dissolved when Corporations Canada issues a Certificate of Dissolution.

Requirements for dissolving a cooperative

A cooperative can apply to dissolve when it has no property or liabilities, unless the cooperative is bankrupt or insolvent. However, bankruptcy does not end a cooperative's existence. A bankrupt or insolvent cooperative cannot apply to be dissolved under the Coop Act. For more information, see Bankrupt and insolvent cooperatives.

If the cooperative owns property or has liabilities, see Dissolving a cooperative that owns property or has liabilities.

Approval of the dissolution of a cooperative

If the cooperative has members but no property or liabilities, members can approve the dissolution by special resolution. If the cooperative has issued investment shares, each class must pass a separate special resolution to authorize the dissolution even if these shareholders are not otherwise entitled to vote.

Dissolving a cooperative that owns property or has liabilities

A cooperative can be dissolved only when its property has been distributed and its liabilities have been discharged.

There are two ways to proceed:

1. Liquidation before starting the dissolution process
   The members can pass a special resolution authorizing the directors to distribute any property and discharge any liabilities in accordance with the articles of the cooperative and the requirements under the Coop Act. If the cooperative has issued investment shares, the shareholders of each class must pass a separate special resolution to authorize the dissolution, even if these shareholders are not otherwise entitled to vote. The directors must then dispose of any property and liabilities before applying for a Certificate of Dissolution.
2. Starting the dissolution process before the liquidation process
   If the cooperative will cease carrying on business while it is in the process of liquidation, it can apply for a Certificate of Intent to Dissolve. Members must authorize the liquidation and dissolution of the cooperative by special resolution. If the cooperative has issued investment shares, the shareholders of each class must pass a separate special resolution to authorize the dissolution even if these shareholders are not otherwise entitled to vote. The Certificate of Intent to Dissolve serves as public notice that the cooperative is no longer carrying on its activities, except to the extent necessary for the liquidation.
   
   When a Certificate of Intent to Dissolve is issued, the cooperative must cease to carry on its activities except to the extent needed for the liquidation. It must also:
   1. notify creditors of its intent to dissolve
   2. perform all the acts required for the liquidation of property in accordance with the Coop Act and to discharge all the cooperative’s liabilities
   3. distribute, subject to the articles and to the provisions of Parts 20 and 21 of the Coop Act, the cooperative's remaining property among the members and shareholders according to their respective rights.

Once the liquidation process is completed, a cooperative can apply for a Certificate of Dissolution.

Documents to file to dissolve or provide notice to dissolve a cooperative

To obtain a Certificate of Dissolution, complete and sign Form 3017 – Articles of Dissolution (see Federal corporation forms and instructions), and send it to Corporations Canada.

To obtain a Certificate of Intent to Dissolve, complete and sign Form 3019 – Statement of Intent to Dissolve or Revocation of Intent to Dissolve (see Federal corporation forms and instructions), and send it to Corporations Canada along with the filing fee (see Services, fees and processing times).

Do not send copies of the directors' resolution or shareholders' special resolution with your articles of dissolution.

Cooperative applications must be filed by email or mail (see How to file and pay for an application).

Reversing a decision to dissolve after a Certificate of Intent to Dissolve is issued

A cooperative can decide not to dissolve once a Certificate of Intent to Dissolve is issued. To stop the dissolution process, the cooperative has to apply for a Certificate of Revocation of Intent to Dissolve by submitting a completed and signed Form 3019 – Statement Intent to Dissolve or Revocation of Intent to Dissolve (see Federal corporation forms and instructions), and send it to Corporations Canada along with the filing fee (see Services, fees and processing times). Once the Certificate of Revocation of Intent to Dissolve has been issued, the cooperative can resume carrying on its activities.

If the Certificate of Dissolution has already been issued, Corporations Canada cannot revoke the Certificate of Intent to Dissolve or the Certificate of Dissolution. However, it is possible to revive the cooperative.

A revival allows a cooperative dissolved under the Coop Act to be restored to its previous legal position in the same manner and the same extent as if it had not been dissolved. To apply for a revival, send a completed and signed Form 3015 – Articles of Revival (see Federal corporation forms and instructions) along with the filing fee (see Services, fees and turnaround times) to Corporations Canada.

Bankrupt and insolvent cooperatives

A cooperative that is bankrupt, that has a trustee under a proposal, or that has an interim receiver under the Bankruptcy and Insolvency Act (BIA) or is insolvent cannot voluntarily dissolve.

A cooperative is bankrupt under the BIA if it has made an assignment into bankruptcy or if a bankruptcy order has been made against it.

A cooperative is insolvent under the BIA if:

• it is unable to meet its obligations as they generally become due, and
• it has ceased paying current obligations in the ordinary course of activities as they become due; or
• the cooperative's property is not sufficient, at a fair valuation, to allow payment of all obligations (meaning that even if all of the property was to be disposed of, there would not be sufficient cash to allow payment of all obligations, whether they are due or will soon become due).