Area of Law: Business Law
Answer # 241
Dissolving a businessRegion: Ontario Answer # 241
If you wish to stop doing business and dissolve your Ontario corporation voluntarily, there are several things that will need to be done. First, you will need to close your business and tax accounts, as well as your business bank accounts. You will also need to ensure that all tax filings, such as payroll and GST/HST, are up-to-date and that no taxes are owing. Visit Canada Revenue Agency for more information regarding closing tax accounts.
Another consideration is what will be done in the case of outstanding contractual obligations, such as leases or purchase orders, as well as any court actions that have already been started. Under the Ontario Business Corporations Act, liabilities and actions existing before the dissolution may be continued as if the corporation had not been dissolved.
Steps to dissolve a corporation
Although a corporation incorporated in Ontario may become inactive and cease its business operations, the Articles of Incorporation remain in force until the corporation is legally dissolved. In order for the business to be permitted to become dissolved, it must be in compliance with all Ontario tax statutes. If there is any tax money owing, the Ministry of Government and Consumer Services will deny the application for dissolution.
In order to dissolve an Ontario corporation, an application first must be made to the Ministry of Finance requesting its consent. The corporation must send a letter to the Ministry of Finance, Client Services Branch requesting them to provide a Letter of Consent to Dissolve Corporation. In the request, you must include the full corporate name, the Ontario incorporation number, and the federal Business Number. The request must be signed by an authorized director of the corporation.
Once the corporation receives the Consent to Dissolve from the Ministry of Finance, the corporation has 60 days to make its application for dissolution to the Ministry of Government and Consumer Services. The request for dissolution is mailed to the Companies and Personal Property Security Branch, 393 University Avenue, Suite 200, Toronto ON M5G 2M2. It must include:
- The Letter of Consent to Dissolve Corporation.
- Two sets of Articles of Dissolution with original signatures (blank articles available online).
- A government fee made payable to the Minister of Finance.
- If desired, you can also include the ServiceOntario Acknowledgement we have Received your Application Form, which allows you to provide the Ministry with an email address in order for them to confirm receipt of your request (this form is available online).
- A covering letter providing a contact name, return address and telephone number.
If you wish to submit the application in person, you can do so at the Companies and Personal Property Security Branch office at 375 University Avenue, 2nd Floor, Toronto ON. It is advisable that you keep a copy of the documents you are submitting, and that you obtain a receipt, or a stamp from the Ministry, that shows they received your application.
Once your request is approved, the Ministry will mail you a copy of the Articles of Dissolution certified with their stamp and the date of the dissolution. The corporation is legally dissolved from the date of the certification.
For information on closing your provincial business, visit ontario.ca. For information on dissolving a business incorporated under the federal Canada Business Corporations Act, visit Corporations Canada. For legal advice and assistance, contact a business lawyer.
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