Dissolving a Corporation

How to Dissolve a Corporation in Canada

What is the Dissolution of a Corporation?

When a corporation dissolves, it means to officially close down or end the enterprise so it is no longer running.

When Can a Corporation Dissolve?

A corporation can dissolve once it has no property or liabilities. Whether this means the corporation has not yet started business, or it has disposed of its current property and liabilities, it is a requirement for dissolution. Bankrupt corporations cannot apply to be dissolved.

Why do Corporations Dissolve?

Corporations may either dissolve voluntarily or involuntarily. A voluntary dissolution is done under the authorization of shareholders, or if there are no shareholders, under the authorization of the director(s).
Involuntary reasons for dissolution may include when the corporation has not followed the rules for corporate entities, such as not maintaining the percentage of Canadian directors as per its provincial requirements or failing to file an annual return.

How to Dissolve a Corporation

Depending on your situation, the process for dissolution may vary. Like mentioned above, a corporation can only dissolve once it has zero property or liabilities.
If you intend to dissolve and you have property, you may wish to:
  • Start liquidating assets before applying for dissolution.

    In this case, after a resolution to dissolve has been passed by shareholders, or each class of shareholders, the corporation distributes the property and discharges liabilities according to the Articles and Canada Business Corporation Act. It may then apply for a Certificate of Dissolution by first submitting a signed copy of Articles of Dissolution to the government.

  • Alternatively, you can start dissolving your corporation before liquidating all your assets.

    Under this course of action, the corporation must apply for a Certificate of Intent to Dissolve by first submitting a Statement of Intent to Dissolve to the government. The Certificate of Intent to Dissolve gives notice to creditors and the public that the corporation is no longer carrying on business. At this time, the corporation must disperse remaining assets among shareholders according to the Canada Business Corporation Act, and once liquidation is done, it can apply for a Certificate of Dissolution to complete the dissolution process.

Corporations Canada reviews your application to make sure the corporation has fulfilled its requirements before issuing the certificate.
Revoking Dissolution
Once the corporation has been issued a Certificate of Dissolution, it cannot revoke its dissolution. However, if the Certificate of Dissolution has not yet been processed and the corporation wishes to revoke its Statement of Intent to Dissolve, it can do so by submitting a Statement of Revocation of Intent to Dissolve for a fee.
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