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In short ...

This service is provided to those who seek to end the activities of their incorporated business. Liquidation refers to the distribution of all company assets and dissolution is the term for the “death” of the corporation.

Why dissolve a company?

Cautious and responsible businessmen and women know that dissolution is a safe process. On the other hand, let well alone thinking that the company will disappear by itself is risky.

In theory, for a provincial incorporation, if the company fails to file its annual declarations for two consecutive years, the Enterprise registrar shall send a notice and the company will be stricken off, according to section 59 of the Act respecting the legal publicity of enterprises. The striking off of the company will then lead to its dissolution.

For a federal incorporation, Industry Canada will dissolve the company according to section 212 of the Canada Business Corporations Act when rights and documents required by law are not filed for a year.

In practice, things are not that simple. During the two years of inactivity of the company, it will be vulnerable to his unpaid creditors, which will be able to institute any necessary legal proceedings. Also, there could be many tax consequences that may ultimately require major investments. Moreover, it is obvious that during these two years, the government still has the right to compel the filing of financial statements and tax returns of the company.

Finally, it should be said that the striking off is not systematic: some companies are never stricken off by the government and therefore continue to exist. This way, anyone can sue the company at any time, although in practice it does not even exist anymore!

In conclusion, better safe than sorry: when one wants to end a business, it is in the best interests of its directors to do it seriously.

For more information or to benefit from our services, contact us now at 514 908-1489.