How Do You Dissolve a Federal Corporation or Partnership in Canada?

Before you start: confirm what you’re actually dissolving

“Federal business partnership” is not a legal category. Canada has no federal partnership statute. Canada Revenue Agency guidance is explicit that whether a partnership exists, and the terms of its dissolution, must be worked out under the partnership law of the relevant province or territory, even when the partnership does business across the whole country. If what you’re winding down is a partnership, the applicable rules are Ontario’s or Alberta’s (or whichever province the partnership is based in), not a federal process, and that provincial-law question is outside what this article can answer.

If instead you are dissolving a corporation incorporated federally under the Canada Business Corporations Act (CBCA), that process genuinely is federal, runs through Corporations Canada, and is set out below.

The federal corporation dissolution process, step by step

1. Confirm which of the three CBCA dissolution routes applies to your corporation (see table below): whether it has issued shares, whether it has any property or liabilities.
2. Pass the resolution the route requires. This is either a resolution of all directors, or a special resolution of shareholders (and of each class of shareholders, if more than one class exists).
3. If the corporation has property or liabilities, the shareholders’ special resolution must authorize the directors to distribute the property and discharge the liabilities, and the corporation must actually complete that distribution and discharge before sending articles of dissolution to the Director.
4. File articles of dissolution with Corporations Canada. There is no government filing fee for this.
5. Notify the Canada Revenue Agency. Send a copy of the articles of dissolution to the CRA and use Form RC145 to close the corporation’s Business Number program accounts (payroll, GST/HST, corporate income tax).
6. Keep the corporation’s records. Corporate records must be retained for six years beginning on the date of dissolution.

If the corporation needs to be wound up over time

Not every dissolution is instant. Where property still needs to be collected, sold, or distributed and liabilities need to be settled over a period rather than all at once, the CBCA provides a longer route: directors, or a shareholder entitled to vote at an annual meeting, propose a voluntary liquidation and dissolution. Once shareholders approve it and Corporations Canada issues a Certificate of Intent to Dissolve, the corporation must stop carrying on business except for what liquidation requires, though it continues to legally exist until a final Certificate of Dissolution issues. During this period the corporation must give notice in every province where it was carrying on business, collect its property, dispose of anything not being distributed in kind to shareholders, discharge its obligations, and complete whatever else liquidation requires before the final certificate is issued.

Dissolution that isn’t voluntary

A federal corporation can also be dissolved without the shareholders or directors choosing it:

• Administrative dissolution: Corporations Canada can dissolve a corporation on its own initiative, after 120 days’ notice, if the corporation hasn’t started business within three years of incorporation, hasn’t carried on business for three consecutive years, has been in default for a year on required filings or fees, or has no directors.
• Court-ordered dissolution: the Director or any interested person can apply to a court to dissolve a corporation that has failed for two or more consecutive years to hold required annual shareholder meetings, has contravened specified CBCA provisions, or obtained a certificate by misrepresentation.
• Oppression-based dissolution: a shareholder can ask a court to order dissolution and liquidation where the corporation’s actions are oppressive or unfairly prejudicial to a shareholder, creditor, officer, or director.

After dissolution

A dissolved corporation isn’t necessarily gone forever. Any interested person can apply to have it revived, restoring it to its previous legal position as though it had never been dissolved, including rights that arose before dissolution or in the gap between dissolution and revival. Records still need to be kept for six years after dissolution, and the CRA still needs a copy of the articles of dissolution and a completed Form RC145 to formally close the Business Number accounts, even after the corporation legally ceases to exist.

If what you actually have is a partnership

Because there is no federal partnership statute, none of the CBCA steps above apply to winding up a partnership. In Ontario or Alberta, dissolving a partnership starts with the partnership agreement itself and that province’s Partnerships Act, not with Corporations Canada or any federal filing. If your business relationship is a partnership rather than a federal corporation, the relevant rules are provincial, and this article’s federal process does not substitute for that provincial-law analysis.