Foreign investors with companies in Canada can make various changes to the business when its direction is not the right one. However, it is also their right to decide to dissolve the company if they no longer want to do business in Canada.
In order to close down a company, the Articles of Dissolution must be prepared and filed with the Canadian Trade Register. Below, our company formation agents in Canada explain the procedure of dissolving a business and how the Articles of Dissolution are drafted. We can assist local and foreign investors who need assistance in preparing the Articles of Dissolution of Canadian companies.
Company dissolution in Canada
The procedure of dissolving a Canadian company implies different procedures, depending on the situation of the company and on whether the company has shareholders and no properties, or the company has no shareholders as a consequence of having no shares issued.
No matter the situation, the Articles of Dissolution must be drafted and filed for approval with the Trade Register once the decision to shut down the business is made.
Our local consultants can help investors draft various essential documents for a company, among which Articles of Amendments and Dissolution.
The company dissolution approval in Canada
Once the decision of dissolving a Canadian company has been made, a special resolution must be passed. In case the company has shareholders, the stockholders will pass this resolution during an extraordinary meeting. Where the company has shareholders with more than one class of shares, the shareholders holding each type of class must pass such a resolution. Where the company has no shareholders, the directors will pass the resolution. Then, the Articles of Dissolution must be prepared.
This country is one of the most prolific economies in the world, which is why our agents can also help you in starting a business in Canada, not only dissolving it.
Steps in dissolving a company in Canada
Once the Articles of Dissolution of the Canadian company are prepared, the following steps need to be completed in order to dissolve the business:
- first, the liquidation of the company must be completed, this implies selling the properties and discharging the liabilities of the company;
- if the liquidation is not completed, the dissolution can be completed by passing a special resolution with the intent of dissolving the business;
- if the company is insolvent, the dissolution decision must be issued by a Canadian court;
- if the liquidation is completed, the dissolution will imply removing the company from the Trade Register’s database.
The Articles of Dissolution or Form 4017 must be filed no matter the type of dissolution a Canadian company is undergoing.
Considering the dissolution of a company is subject to a complex process, our company registration advisors in Canada can help during this procedure.
How to fill out the Articles of Dissolution
The Articles of Dissolution of a Canadiancompany must contain specific information, among which:
- the corporate name or the business number of the Canadian business and the corporation number;
- the status of the corporation – one must check whether the company is bankrupt or not;
- the legislation under which the company will be dissolved (there are 4 situations applicable).
The following situations can be encountered when filing the Articles of Dissolution of a company in Canada:
- when the company has not started any commercial activity and has no property, therefore no liabilities;
- the company has issued shares, but has no properties;
- the company has issued shares and has properties which have been liquidated for the purpose of the dissolution;
- the company has issued shares and has properties that are to be discharged for the purpose of dissolution.
Our Canadian company formation advisors can guide you through the company liquidation and dissolution procedures depending on the situations above.
Facts on company dissolution in Canada
Those who want to dissolve Canadian companies have several requirements they must comply with:
- in the case of insolvent companies, at least 3 years must have passed since the trustee has terminated the liquidation of the company;
- companies which have not commenced any commercial activity can dissolve the company within 2 years of the shareholders have issued an agreement in this sense;
- the timeframe for filing accounting documents with the Canadian Revenue Agency for dissolution purposes ranges between 15 to 30 days, depending on the province/territory;
- a dissolved company must appoint a registered agent to keep the corporate records for 6 years after the dissolution.
If you need help with company dissolution in Canada, please contact us.