The Dissolution of an Ontario Business Corporation

Authorization Requirements

By Jonathan Hureau

In the former scenario where a corporation has already issued shares, the corporation can be dissolved upon authorization in the form of: (1) a special resolution passed at a meeting of the shareholders of the corporation duly called for that purpose or, if a corporation is not an offering corporation, by such other quantity of votes cast as the articles of the corporation allow (provided such other proportion is not less than 50 percent of the votes of all shareholders of the corporation entitled to vote at the meeting), or (2) the consent in writing of all the shareholders of the corporation entitled to vote at such a meeting.[2]

In the Articles of Dissolution for such a scenario, the corporation is required confirm the following statements that:

• it has no debts, obligations or liabilities or its debts, obligations or liabilities have been duly provided for in accordance with subsection 238(3) of the BCA or its creditors or other persons having interests in its debts, obligations or liabilities consent to its dissolution;
• after satisfying the interests of creditors in all its debts, obligations and liabilities, if any, it has no property to distribute among its shareholders or that it has distributed its remaining property ratably among its shareholders according to their rights and interests in the corporation or in accordance with subsection 238(4) of the BCA where applicable;
• if it was at any time a registered owner of land in Ontario, that it is no longer a registered owner of land in Ontario; and
• there are no proceedings pending in any court against it.[3]

In the latter scenario where the corporation has not commenced business and issued any shares, the corporation can be dissolved pursuant to authorization by all of its incorporators or their personal representatives. In the Articles of Dissolution for such a scenario, the corporation is required to confirm that its dissolution has been duly authorized under clause 237(c) of the BCA and further confirm the following required statements that:

• the corporation has not commenced business;
• ·none of its shares has been issued;
• it has no debts, obligations or liabilities;
• after satisfying the interests of creditors in all its debts, obligations and liabilities, if any, it has no property to distribute or that it has distributed its remaining property to the persons entitled thereto;
• if it was at any time a registered owner of land in Ontario, that it is no longer a registered owner of land in Ontario; and
• there are no proceedings in any court against it.[4]

It should be noted that in each of the above scenarios, the corporation must further confirm in the Articles of Dissolution that it has filed all notices and returns required of it under the Corporations Information Act, R.S.O. 1990, c. C.39.[5]

At SorbaraLAW, we can assist with the preparation and filing of the documentation required to authorize the dissolution of your Ontario business corporation.

Legal Disclaimer: The above article is for informational purposes only. It does not constitute legal advice on any matter or create a solicitor-client relationship.