How to Dissolve a Corporation in Ontario

To dissolve a corporation in Ontario, the shareholders authorize the dissolution by special resolution, the corporation pays or provides for its debts and distributes what is left, its tax accounts are brought up to date with the CRA, and Articles of Dissolution are filed through the Ontario Business Registry with a $25 government fee. Once the Certificate of Dissolution issues, the corporation no longer exists. This guide walks through each step under the Ontario Business Corporations Act (OBCA), what the government checks, and what still matters after the corporation is gone.

Leaving an inactive corporation alone is not the same thing. Its annual return and tax filing obligations keep running, and if the province eventually dissolves it for non-compliance, anything still in its name forfeits to the Crown. A voluntary dissolution closes the corporation on your terms and on your timeline.

What dissolution means

A voluntary dissolution under the OBCA ends the corporation's legal existence on the date set out in the Certificate of Dissolution. From that date, the corporation stops being a separate legal person: it can no longer carry on business, hold property, or enter into obligations, and its annual filing requirements end.

Dissolution is not the same as selling the business, ceasing operations while the corporation stays on the register, or merging it into another company. If the real goal is to fold one corporation into a related one, an amalgamation is often the better tool, because the assets and history carry over instead of being wound up.

Two routes: active corporations and corporations that never started

Section 237 of the OBCA sets out who can authorize a voluntary dissolution. The answer depends on whether the corporation ever got going.

• Corporations that have issued shares. The dissolution is authorized by a special resolution passed at a shareholders' meeting called for the purpose, or by the written consent of all shareholders entitled to vote at that meeting. A special resolution normally needs at least two-thirds of the votes cast. The articles of a corporation that is not an offering corporation can set a different proportion, but never less than 50 per cent of the votes of all shareholders entitled to vote. A director or officer signs the Articles of Dissolution.
• Corporations that never commenced business and never issued shares. The dissolution is authorized by all of the incorporators or their personal representatives, and all of them sign the articles. The articles confirm that the corporation has not commenced business, has issued no shares, and has no debts, obligations or liabilities.

Most owner-managed corporations use a written resolution signed by every voting shareholder, which avoids calling a meeting. Place the signed resolution in the corporation's minute book before anything is filed.

If the owner has died, an executor usually has to deal with the directors first, since the articles must be signed by a director or officer. Ontario's ministry cannot advise executors, so legal advice on electing new directors and passing the dissolution resolution is the normal first step. Any change of directors must be reported by filing a Notice of Change within 15 days.

The steps, in order

• Confirm the route. Check whether the corporation issued shares or commenced business, because that decides who authorizes the dissolution and who signs.
• Authorize the dissolution. The shareholders pass a special resolution (or the incorporators give their authorization) 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, sell or transfer its assets, pay its debts and liabilities, and transfer out any Ontario land it owns.
• Settle with the CRA. Bring every return up to date, file the final GST/HST return, make the final payroll remittances and file the T4 slips, and pay what is owing. Obtain a clearance certificate before distributing property.
• Distribute what is left. Distribute any remaining property rateably among the shareholders according to their rights under the articles.
• File Articles of Dissolution. Submit the dissolution filing through the Ontario Business Registry. The request for Minister of Finance consent is forwarded automatically, and once the filing is accepted, the corporation is dissolved.
• Close out the CRA accounts. File the final T2 return for the tax year ending on the date of dissolution and send the CRA a copy of the articles so the business number accounts can be closed.

Winding up: debts, property and land

The Articles of Dissolution contain statements the corporation must be able to make truthfully. Under section 238 of the OBCA, a corporation that issued shares confirms that:

• it has no debts, obligations or liabilities, or they have been duly provided for, or its creditors consent to the dissolution;
• after satisfying its creditors, it has no property left to distribute, or it has distributed its remaining property rateably among its shareholders according to their rights;
• if it ever owned land in Ontario, it is no longer a registered owner of land in Ontario; and
• there are no court proceedings pending against it.

If a creditor or a shareholder cannot be found, the OBCA allows the corporation, by agreement with the Public Guardian and Trustee, to pay or deliver that person's share to the Public Guardian and Trustee to hold in trust. That payment counts as providing for the debt or making the distribution. The land statement is a real checkpoint: the Director can refuse to endorse the articles on learning that the corporation is still a registered owner of land in Ontario.

Distributions on a wind-up also have tax consequences for the shareholders. Amounts paid out above the paid-up capital of the shares can be treated as a deemed dividend under the Income Tax Act, so plan the final distribution with your accountant before money leaves the corporate account.

Closing the tax accounts with the CRA

The Ontario filing and the CRA are separate systems. Dissolving the corporation with Ontario does not close its business number accounts, and the CRA treats the corporation as still existing, with returns still due, until it is told otherwise. Work through each program account:

• Corporate income tax (RC). File every outstanding T2 return. After dissolution, file a final T2 for the tax year ending on the date of dissolution and answer yes at line 078, which asks whether this is the final return up to dissolution. Ontario corporate income tax is reported on the same T2.
• GST/HST (RT). Close the account using the day the business closes as the cancellation date, file the final return and remit any balance. When a business stops being a GST/HST registrant, it is generally treated as having sold the property it still holds, so tax can be payable on assets kept at that point.
• Payroll (RP). When the business stops operating, remit all CPP contributions, EI premiums and income tax withheld within seven days, and file the T4 slips and T4 Summary within 30 days. Give each former employee their T4 slip and a Record of Employment.
• The business number itself. Once the corporation is dissolved, review Form RC145, Request to Close Business Number Program Accounts, and send the CRA a copy of the articles of dissolution.

If the corporation was registered for a tax that the Ontario Ministry of Finance administers directly, such as employer health tax, close that account as well.

Filing Articles of Dissolution in Ontario

Ontario Articles of Dissolution are filed through the Ontario Business Registry, either online or by mail using Form 5268. To file online, you need a company key giving you authority over the corporation, and you should have ready:

• the corporate name and Ontario Corporation Number (OCN);
• contact information and the official email address for the corporation;
• the requested effective date, which can be the filing date or a date up to 30 days later;
• confirmation that the dissolution was duly authorized and that the required statements are true; and
• a credit or debit card for the $25 filing fee.

During the filing, the registry produces a PDF of the articles to be signed by a director or officer, or by all incorporators for a corporation that never started. Electronic signatures are permitted, and a properly signed copy should be kept with the corporate records. Once the filing is accepted, the Certificate of Dissolution, a copy of the endorsed articles and the payment receipt are emailed to the corporation's official email address and to the contact person.

Is Ontario Ministry of Finance consent still required?

Yes, but you no longer apply for it on your own. Under the ministry's notice for filing Articles of Dissolution, effective October 19, 2021 when the Ontario Business Registry launched, articles of dissolution under section 238 of the OBCA must be supported by written consent from the Minister of Finance. The request for consent is forwarded to the Ministry of Finance automatically when you file, so there is no separate application to prepare.

Consent still affects timing. The certificate is dated when the articles, the consent and the fee have all been received, and a requested future effective date only works if consent has been obtained by that date. Guides written before the registry launched often describe obtaining a consent letter yourself before filing. That step is now handled through the filing itself.

After dissolution

Keep the corporation's records, including the minute book and tax filings, for the retention period required after dissolution. The Income Tax Regulations require a dissolved corporation's records, including minutes and the general ledger, to be kept until two years after the date of dissolution, unless the CRA approves earlier destruction. The CRA can still review the final years, and a clean record is your protection if anything is questioned later, so many owners keep them longer.

Dissolution does not wipe out claims. Under section 242 of the OBCA, a proceeding started before dissolution can continue, and a new proceeding can be brought against the corporation as if it had not been dissolved. Under section 243, each shareholder who received property on the distribution is liable to such a claimant up to the amount that shareholder received.

Anything the corporation still owns on the date of dissolution, whether a forgotten bank balance, a vehicle, a tax refund or a trademark, immediately forfeits to and vests in the Crown under section 244 of the OBCA. Getting forfeited property back is difficult, so empty the accounts and transfer every asset before the effective date.

Why not just let the corporation lapse?

Some owners simply stop filing and wait for the province to dissolve the corporation. Under section 241 of the OBCA, the Director can give notice and then dissolve a corporation that fails to meet a filing requirement under the Corporations Information Act, fails to pay a required fee, or is reported by the Minister of Finance as in default under certain Ontario tax statutes.

That route is slower and messier. The CRA accounts stay open and returns keep coming due, any property left in the corporation forfeits to the Crown, and nobody controls the timing. If the corporation is staying alive for now, keep its Ontario annual return current instead, along with the other annual filing obligations that apply to it.

If you need the corporation back

This is the biggest difference between the two kinds of dissolution in Ontario. A corporation dissolved by the Director under section 241 can be revived on the application of an interested person, including a director, officer or shareholder, by filing articles of revival no more than 20 years after the dissolution. Korporex can help with reviving an Ontario corporation dissolved for non-compliance.

A corporation that dissolved voluntarily by filing Articles of Dissolution is different. The ministry's notice states that the OBCA has no provision for articles of revival in that case, and the only way to revive the corporation would be a special Act of the Legislature. Treat a voluntary dissolution as permanent, and before you file, confirm there are no outstanding refunds, contracts, licences, domain names or claims that need the corporation to exist.

Federal (CBCA) corporations

A corporation incorporated under the Canada Business Corporations Act dissolves with Corporations Canada, not the Ontario Business Registry, even if it operates in Ontario. Under section 210 of the CBCA, a corporation that has issued no shares can be dissolved by resolution of all the directors. One with no property and no liabilities can be dissolved by special resolution of the shareholders, with a separate special resolution of each class where there is more than one class. One with property or liabilities can be dissolved by special resolution once it has distributed its property and discharged its liabilities.

The federal filing is Form 17, Articles of Dissolution. A corporation that will stop carrying on business while it liquidates can first file Form 19, Statement of Intent to Dissolve. The differences between federal and provincial corporations carry through to the end of the corporation's life:

The CRA steps are the same for both. If a federal corporation is staying active instead, its federal annual return still has to be filed each year.

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.

When the debts are paid, the property is distributed and the tax accounts are in order, you can file your corporation's Articles of Dissolution with Korporex and close the file for good.

Frequently asked questions