How to Dissolve a Corporation in Ontario (Voluntary Dissolution)

To dissolve a corporation in Ontario, the shareholders approve the dissolution by special resolution, the corporation pays or provides for its debts and distributes what's left, and then files Articles of Dissolution with the Ontario Business Registry for $25. Ontario's Ministry of Finance must consent first. The request is sent automatically and can take up to 30 business days.

Dissolving properly matters. An Ontario corporation that is simply abandoned still has filing duties with the province and the CRA. This guide covers who can dissolve, the steps in order, the tax wind-up, and what happens to anything the corporation still owns.

What does voluntary dissolution mean in Ontario?

Voluntary dissolution is when the owners choose to end the corporation's legal existence under section 237 of the Business Corporations Act (OBCA). It is different from an administrative dissolution, where the Director dissolves a corporation for failing to file returns, and from a court-supervised winding-up or bankruptcy of an insolvent company.

Voluntary dissolution suits a solvent corporation that has stopped operating, or one that was incorporated but never used. Once the certificate of dissolution is issued, the corporation stops existing as a legal person.

Who can authorize the dissolution?

The OBCA allows three routes:

For a typical owner-managed corporation with one or two shareholders, the simplest route is a written resolution signed by every voting shareholder.

What must be true before you file Articles of Dissolution?

For an active corporation, the Articles of Dissolution must confirm all of the following:

• The dissolution has been duly authorized under section 237.
• The corporation has no debts, obligations or liabilities, or they have been provided for, or its creditors consent to the dissolution.
• After creditors are satisfied, it has no property left, or it has distributed the remaining property rateably among shareholders according to their rights.
• It is no longer a registered owner of land in Ontario, if it ever was.
• There are no proceedings pending in any court against it.

A corporation that never commenced business confirms that it issued no shares, has no debts and has no proceedings against it. If a creditor or shareholder can't be found, the corporation can pay the debt or deliver the shareholder's share to the Public Guardian and Trustee, to be held in trust.

How to dissolve a corporation in Ontario: step by step

1. Get up to date with filings. Make sure Ontario annual returns are filed and the corporation's information in the OBR is current. Our Ontario annual return guide explains the deadline: within six months after the fiscal year-end.
2. Pass the shareholder resolution authorizing the dissolution, by special resolution at a meeting or in writing signed by all voting shareholders.
3. Stop operating and settle debts. Collect receivables, pay suppliers, lenders and the CRA, and end leases and contracts.
4. Wind up the tax accounts. Remit final payroll deductions and issue T4s, file the last GST/HST return, and prepare the final T2 (see below).
5. Distribute remaining property to shareholders according to their share rights. Consider a CRA clearance certificate first.
6. File Articles of Dissolution in the OBR with the corporation name, Ontario corporation number and effective date, and pay the $25 fee. A request for consent goes to the Ministry of Finance automatically.
7. Wait for consent and the certificate. The Ministry of Finance gives consent electronically within 30 business days of receiving the request. Once the articles are endorsed, the corporation is dissolved.
8. Close the business number and keep the records (see below).

How much does it cost to dissolve an Ontario corporation?

The filing fee is small. The real cost of dissolving is usually the accountant's work on the final financial statements and returns.

Do you still need Ministry of Finance consent?

Yes. Ontario still requires Ministry of Finance consent before it will dissolve or revive a business corporation. You don't have to request it yourself. When you file Articles of Dissolution in the OBR, the system forwards the request to the Ministry, which responds electronically within 30 business days. Plan for that wait when you choose the effective date.

Closing CRA accounts and filing the final T2

The CRA treats a corporation as still existing until it is properly dissolved and the CRA knows about it. Until then, the corporation has to file a T2 return every year, even with no tax payable.

• Payroll (RP): remit outstanding source deductions, file final information returns and give T4 or T4A slips to former employees.
• GST/HST (RT): file the final return and close the account.
• Corporation income tax (RC): file a final T2 for the year ending on the dissolution date, shown on the Articles of Dissolution.
• Business number: check Form RC145, Request to Close Business Number Program Accounts, to see whether you also need to send the CRA a copy of the Articles of Dissolution.

Whoever distributes the corporation's property should consider a clearance certificate (Form TX19) before distributing. It protects them from personal liability for the corporation's unpaid taxes. The CRA asks for the dissolution resolution, the notice of assessment for the final T2 and a distribution statement, so allow time for the assessment.

After dissolution, the CRA requires a dissolved corporation's records to be kept for two years after the date of dissolution.

What happens to assets left in a dissolved corporation?

Under section 244 of the OBCA, any property not disposed of on the date of dissolution immediately forfeits to and vests in the Crown. That includes money left in a bank account, vehicles, equipment, intellectual property and shares in other companies. Distribute or sell everything before the dissolution takes effect.

Dissolution doesn't wipe out claims either. Legal proceedings can still be started or continued against a dissolved corporation. Each shareholder who received property on the distribution can be liable to claimants up to the amount they received.

Dissolution vs leaving the corporation inactive

Ontario has no "inactive" or "dormant" status. A corporation you stop using is still an active corporation in law.

If you might use the corporation again, or it holds assets you haven't decided about, keeping it alive and filing its returns can be simpler. If you're sure, dissolving ends the yearly filings for good. If you keep it, we can file the annual return for you or update your directors with a notice of change.

Can you revive a voluntarily dissolved Ontario corporation?

Usually not by the standard route. Ontario's revival application, Articles of Revival at $330, applies to corporations the Director dissolved, typically for not filing annual returns. It must be made within 20 years of dissolution. The OBCA's revival provision doesn't cover corporations that dissolved themselves voluntarily, so treat voluntary dissolution as permanent.

If your corporation was dissolved by the Director rather than voluntarily, revival is available. Our guide on Ontario incorporation costs compares what it costs to start a new corporation, and a certificate of status confirms whether a corporation is active or dissolved.