Dissolving a Business CorporationReader Rating: 4.50Star

Learn how to prepare a request to dissolve a corporation under the Canada Business Corporations Act (CBCA).

Note:

Although the information provided here will assist you in completing the dissolution process quickly and accurately, it is not intended to replace legal advice. You may wish to consult a lawyer or other professional advisor to ensure that the specific needs of your corporation are met.

Table of Contents

What is dissolution?

Dissolution is the legal termination of a corporation. In other words, dissolution is the act of ending the existence of a corporation. A corporation is dissolved when a Certificate of Dissolution is issued by Corporations Canada. The effective date is shown on the Certificate of Dissolution.

When can a corporation apply for dissolution?

A corporation can apply to dissolve when it has no property or liabilities. The exception is a bankrupt corporation. Bankruptcy does not end a corporation's existence. A bankrupt corporation cannot request to be dissolved under the CBCA.

If the corporation owns property or has liabilities, refer to How can a corporation dissolve if it owns property or has any liabilities?

top of page

Do shareholders need to approve the dissolution?

If the corporation has shareholders but no property or liabilities, shareholders can approve the dissolution by special resolution. If there is more than one class or group of shareholders, each class or group must pass a special resolution to authorize the dissolution even if these shareholders are not otherwise entitled to vote.

If the corporation has no shareholders because no shares were issued, the directors can pass a resolution to authorize its dissolution.

top of page

How can a corporation dissolve if it owns property or has any liabilities?

A corporation 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 shareholders can pass a special resolution authorizing the directors to distribute any property and discharge any liabilities in accordance with the articles of the corporation and the requirements under the CBCA. If there is more than one class or group of shareholders, each class or group must pass a 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 corporation will cease carrying on business while it is in the process of liquidation, it may wish to apply for a Certificate of Intent to Dissolve. Shareholders must authorize the liquidation and dissolution of the corporation by special resolution. If there is more than one class or group of shareholders, each class or group must pass a 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 corporation 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 corporation 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. give notice of the intent to dissolve in each province in Canada where the corporation was carrying on activities at the time it sent the Statement of Intent to Dissolve to Corporations Canada;
    3. do all the acts required for the dissolution; for example, proceed to collect the corporation's property, to dispose of the property that is not to be distributed in kind to shareholders and to discharge all the corporation's obligations; and
    4. distribute the corporation's remaining property among the shareholders according to their respective rights and the provisions of the CBCA.
    Once the liquidation process is completed, an application can be made for a Certificate of Dissolution.
top of page

Can a corporation decide not to dissolve once a Certificate of Intent to Dissolve is issued?

Yes. The corporation would have to apply for a Certificate of Revocation of Intent to Dissolve by submitting a completed and signed Form 20 – Statement of Revocation of Intent to Dissolve. There is a filing fee.

Once the Certificate of Revocation of Intent to Dissolve is issued, the corporation can resume carrying on its activities.

If the Certificate of Dissolution has been issued, the Certificate of Intent to Dissolve cannot be revoked. However, it is possible to revive the corporation. Please see the information on the Corporations Canada website about reviving a business corporation.

What documents must be filed to dissolve a corporation?

To obtain a Certificate of Dissolution, a completed and signed copy of Form 17 – Articles of Dissolution must be submitted to Corporations Canada. There is no filing fee.

To obtain a Certificate of Intent to Dissolve, a completed and signed copy of Form 19 – Statement of Intent to Dissolve must be submitted to Corporations Canada. There is no filing fee.

Copies of the directors' resolution or shareholders' special resolution should not be submitted with the application.

top of page

Rate this page

The content of this page was useful to me.

Share this page

To share this page, just select the social network of your choice:
  • More

No endorsement of any products or services is expressed or implied.