Corporate Breakup: A Guide to Dissolving Your Corporation
Dissolving a corporation in Ontario can be a bit of complex process and it is important to follow the proper steps to ensure that the dissolution is completed efficiently. In this article, we will outline the steps involved in dissolving a corporation in Ontario, as well as some important considerations to keep in mind.
To dissolve a corporation you must follow the steps outlined in the Ontario Business Corporations Act (BCA). The first step is to pass a special resolution of the shareholders approving the decision of the board of directors to dissolve the corporation. This resolution must be adopted by at least two-thirds of the votes cast at a meeting of the shareholders, or by a unanimous written resolution of all of the shareholders. This resolution usually includes a resolution appointing a liquidator of the estate and effects of the corporation.
The next step is to pay off any outstanding debts and liabilities of the corporation. This includes paying any outstanding taxes, as well as any debts owed to creditors or employees. Once the debts and liabilities have been paid off, you must prepare and file articles of dissolution with the Ontario Ministry of Government and Consumer Services. This document will provide information on the dissolution of the corporation, including the date of dissolution and the names of the directors who are authorized to sign the articles. Before you file the articles, you must obtain the consent of the Minister of Finance to the winding-up of the corporation. This is typically done by submitting a request for consent along with the articles of dissolution. The request for consent must also include a fee payable to the ministry along with the signed Articles of Dissolution and the shareholders' special resolution.
It is important to note that dissolving a corporation in Ontario is a complex process and may involve additional steps depending on the specific circumstances of your corporation. It is highly recommended that you seek legal advice to ensure that the dissolution is handled properly and efficiently.
In addition, there are several important considerations to keep in mind when dissolving a corporation in Ontario. First, you must ensure that all of the required documents and paperwork are properly completed and filed. Failure to do so can result in delays and additional costs. Second, you should be mindful of any ongoing contracts or agreements that may be impacted by the dissolution of the corporation. It is important to address these issues before proceeding with the dissolution to avoid any potential legal issues. Finally, you should be aware of any potential tax implications of dissolving a corporation in Ontario. It is advisable to seek the advice of a tax professional to ensure that you are fully aware of your tax obligations and to minimize any potential tax liabilities.
In conclusion, dissolving a corporation in Ontario is a process that requires careful planning and attention to detail. By following the steps outlined in the BCA and seeking the advice of legal and tax professionals, you can ensure that the dissolution of your corporation is handled competently.