voluntary dissolution

A company may apply for voluntary dissolution if it has no assets or foreign debts. In other words, the company can only be dissolved when the property has been distributed and shareholders' liability has been discharged.

Two Ways to Disband

• Clear taxes first, then dissolve: Ontario companies require that taxes be cleared before dissolution. If the shareholders unanimously agree to voluntarily dissolve the company, all foreign debts need to be repaid first, the government has completed tax clearance, and the shareholders have distributed the remaining assets before submitting an application for dissolution.

• Dissolution first, then tax clearance: Federal corporations require that the company be closed before tax clearance. On the day when the shareholder resolution agrees to dissolve the company, the company dissolution application can be sent. It should be noted that after the company is dissolved, tax clearance must be carried out, otherwise it will be inspected by the tax bureau.

Letter of Dissolution

When filing an application for dissolution, the company must cease all activities except liquidation of debt relationships and meet the following requirements:

• Notify the creditors of the company's intention to dissolve
• Submit the company's deregistration application to the relevant Canadian authorities
• Execute the final distribution of the company's property and remaining assets

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