A company can apply for voluntary dissolution if it has no assets or external debts. In other words, the company can only be dissolved if the property has been distributed and the shareholders' liabilities have been discharged.
Two ways to disband
• Clear taxes first, then dissolve: Ontario companies require that taxes be paid before they can be dissolved. If shareholders unanimously agree to voluntarily dissolve the company, they must first repay all foreign debts, complete the government tax payment, and distribute the remaining assets to shareholders before submitting a dissolution application.
• Dissolve first, clear taxes later: Federal companies require that the company be closed before clearing taxes. On the day when shareholders agree to dissolve the company, the company dissolution application can be mailed. It should be noted that the company must clear taxes after dissolution, otherwise it will be audited by the tax bureau.
Letter of Intent to Dissolve
When submitting a dissolution application, the company must cease all activities except for the liquidation of debts and meet the following requirements:
• Notify creditors of the company's intention to dissolve
• Submit company deregistration application to relevant Canadian authorities
• Execute the final distribution of the company's property and residual assets