To dissolve a corporation , there are a few steps to undertake with your lawyer. This blog summarizes those steps for business owners.
The first step involves getting clear instructions and information from the client including contact information from the client’s accountant. The lawyer will want a copy of the clients final Tax Returns filed or at least assurances that all is in order from the client and his or her accountant.
It is also a good idea to make sure with the relevant taxing authority such as the Ministry of Finance that the company is up to date with its annual tax filings. This way, in the event that the company is not up to date with its tax filings, it can proceed with doing so before receiving a request for a consent letter from the client to the the Ministry of Finance to dissolve.
The second step requires a consent letter to dissolve upon the request from the Ministry of Finance. This letter is valid for sixty days. During that prescribed time period, the Articles of Dissolution are required to be completed and filed with the consent letter. The Articles of Dissolution should be accompanied with any Dissolution Agreement, a Special Resolution signed by the director(s) and/or shareholder(s) authorizing the Dissolution and a consent letter by the client to dissolve the company. A second copy of the consent letter by the client would be needed for a Tax Clearance Certificate.
With respect to the Tax Clearance Certificate, the lawyer should be instructed by the client whether they would like a Tax Certificate before proceeding. If so, if in Canada, a Direction to the Canada Revenue Agency (the “CRA”) should be prepared for the client to sign authorizing the CRA to communicate with the lawyer. A similar requirement is likely for each relevant taxing authority in the United States, such as the Internal Revenue Service (the “IRS”).
Additionally, the lawyer should prepare a draft account to inform the client how much is necessary to cover the fees, the disbursements and the courier. Ultimately, an appointment should be set for the client to meet with the lawyer to sign the Articles of Dissolution, the Resolution and Dissolution Agreements.
Once the corporate documents are signed, they are sent to the Ministry of Government Services in Canada or the relevant governing body in the United States (which is typically state specific). When they are returned, if in Canada, a copy of the Articles of Dissolution must be sent to the Ministry of Finance for their records and a second copy to the CRA. An additional copy should be sent to the accountant with a covering letter and a copy of the reporting letter for their records. There are similar filing requirements in the United States.
Once finalized, the lawyer can have the client pick the Minute Book, Certificate and Corporate Seal.
Conduct Law is a business based law firm with locations in Florida, including Orlando and West Palm Beach and Ontario, including Ottawa, Barrhaven, Kanata and Winchester. Our professionals are experienced business lawyers who can help with corporate, estates, real estate matters including implementing corporate structures (or dissolving them) depending on your legal corporate requirements. Feel free to call or write one of our professionals at email@example.com or 613.440.4888 for all of your business, commercial, real estate and estate planning needs.