Dissolving a corporation in Ontario, Canada can be a complicated process. It is important to understand the steps involved and what is required in order to dissolve a company properly. For illustration, there were 12,821 corporations dissolved in Canada during 2020.
In this blog post, we will break down the dissolution process for you and provide information on each step you need to take. Let’s get started.
What is dissolving a corporation?
Dissolving a corporation is the legal process of ending the existence of a company. This can be done by voluntary action on the part of the shareholders or directors, or it can be ordered by a court. Once a corporation is dissolved, it no longer has any legal existence, and its assets are distributed to its shareholders.
There are two main ways to dissolve a corporation in Ontario, Canada:
- By filing articles of dissolution with the Corporations Canada; or
- By having a court order that the corporation be wound up and dissolved.
Each method has different requirements and steps that must be followed in order for the dissolution to be completed properly.
Articles of dissolution must be filed with the Registrar of Companies in order for a corporation to be dissolved. The articles must be signed by all of the directors of the corporation and must include the following information:
- The name of the corporation;
- The date of dissolution;
- The signatures of all directors.
Once the articles are filed, the Registrar will issue a Article of Dissolution. This certificate is proof that the corporation has been dissolved and can be used to remove the company from any government records it is listed on.
The other method for dissolving a corporation is through a court order. This process is typically used when there are disputes among shareholders or creditors about how to distribute the assets of the company. In order to have a corporation dissolved by court order, an application must be made to the Superior Court of Justice.
The court will then review the application and decide whether or not to grant the order. If the order is granted, the company will be wound up, and its assets will be distributed according to the terms set out in the order.
Both methods for dissolving a corporation have their own benefits and drawbacks. It is important to consult with a lawyer like ours at Prudent Law before taking any action to dissolve a corporation in Ontario, Canada.
How much is it to dissolve a corporation in Ontario?
The cost of dissolving a corporation in Ontario, Canada will vary depending on the method you choose.
If you file articles of dissolution with Corporations Canada, the filing fee is $200. You may also be required to pay other fees, such as the fee for certified copies of the articles or the dissolution certificate.
If you have a corporation dissolved by court order, there will be additional costs associated with making the application to the court and having the company wound up. These costs will vary depending on the complexity of your case and can range from a few thousand dollars to tens of thousands of dollars.
It is important to speak with a lawyer about all of the potential costs before taking any action to dissolve your corporation to reduce fees and the time you invest.
How do I get an article of dissolution in Ontario?
If you choose to file articles of dissolution with Corporations Canada, you must complete and sign the articles, and then submit them to the Registrar. The Registrar will review the articles and, if they are in order, will issue an Article of Dissolution.
The Article of Dissolution is proof that your corporation has been dissolved and can be used to remove the company from any government records it is listed on.
You can obtain blank copies of the Articles of Dissolution from the Ontario Government website or from the office of Corporations Canada.
What happens when you dissolve a corporation?
When a corporation is dissolved, it ceases to exist. This means that the company will no longer have any legal rights or obligations.
All of the company’s assets will be distributed according to the terms set out in the articles of dissolution or the court order. If there are any debts or liabilities outstanding, they will need to be paid off before the assets can be distributed.
Once the company is dissolved, its name can no longer be used by anyone, and it will be removed from any government records it is listed on.
If you have any questions about dissolving a corporation in Ontario, Canada, please contact our office, and we would be happy to assist you.
Final thoughts on dissolving corporations in Ontario
Dissolving a corporation is a big decision and one that should not be taken lightly. There are many factors to consider, such as the cost, the time investment, and the distribution of assets.
It is important to speak with a lawyer before taking any action to dissolve a corporation. Our team at Prudent Law would be happy to assist you in this process and answer any questions you may have. Contact us today to get started.