When an Ontario corporation has served its purpose, you do not just stop using it. Leaving it inactive keeps the annual-return and tax obligations running. Dissolving it properly closes the corporation as a legal entity. Here is how to dissolve a corporation in Ontario through a voluntary dissolution.
What dissolution means
A voluntary dissolution under the Ontario Business Corporations Act ends the corporation's legal existence. Once dissolved, the corporation stops being a separate legal person: it can no longer carry on business, hold property, or owe obligations, and its annual filing requirements end.
The steps, in order
- Authorize the dissolution. The shareholders pass a special resolution approving the dissolution and authorizing the directors to wind up the corporation's affairs.
- Wind up the business. Stop operating, collect what is owed to the corporation, pay off its debts and liabilities, and distribute any remaining property to the shareholders.
- Settle with the CRA. File the final corporate tax return, close the GST/HST and payroll accounts, and file the final returns for each. The corporation should owe nothing before it is dissolved.
- File Articles of Dissolution. Submit the dissolution filing through the Ontario Business Registry. Once accepted, the corporation is dissolved.
After dissolution
Keep the corporation's records, including the minute book and tax filings, for the retention period required after dissolution. The CRA can still review the final years, and a clean record is your protection if anything is questioned later.
Getting it done
The mechanics are straightforward but the order and the CRA side are easy to get wrong. Korporex handles voluntary dissolution filings for Ontario and federal corporations online, so the Articles of Dissolution are prepared and filed correctly. For the final tax returns themselves, a qualified accountant should confirm everything is closed with the CRA.