Dissolving a Corporation is a standard part of doing business – what isn’t a standard part of a doing business? Being dissolved involuntarily.
A Corporation may be dissolved for failure to comply with filing requirements, is in default with certain statutes (like Alcohol and Gaming, Corporate Tax Act etc.), or it has not complied with the Securities Act.
The most common form of involuntary dissolution we see is failure to comply with filing requirements. Corporations are required to file Annual Returns yearly, which previously was filed automatically when the company’s tax returns were filed. This changed October 19, 2021 when the new Business Registry came into effect. Corporations are now required to file their Annual Returns on their own, or through their accountant or corporate lawyer. If the return is not filed, it is presumed that the Corporation no longer operating, therefore resulting in the involuntary dissolution.
There is not a clear practice across the board on the filing of the Annual Return and it’s imperative that we ask each of our clients to confirm who will be completing this filing for them. Some of our clients’ accountants are filing this, some of our clients are filing on their own, and some of our clients are using our offices to file for them.
Discovering a year after dissolution that you are no longer active can come as a surprise. That said, notices are sent out to Corporation’s contact on file advising the pending dissolution. It’s important that the contact information with respect to address and email is kept current and the filing of the Annual Return is just one of the ways to ensure that.
While you can revive a Corporation, it’s a lot easier, and less expensive, to just file Annual Returns.
Christine Allan, Law Clerk