The cessation of a company's activities does not automatically terminate its legal existence. A company can cease operating its business while continuing to exist until it is dissolved in accordance with applicable law.
When a company ceases its activities, it is therefore necessary to determine whether it will be kept inactive or whether steps will be taken to dissolve it.
Before making this decision, it is particularly useful to check:
If the company remains inactive
As long as it is not dissolved, the company continues to exist. It must therefore generally continue to comply with the corporate, governmental and tax obligations that apply to it, even if it no longer carries out any activities.
If the company is to be dissolved
When activities have definitively ceased and the company is no longer of use, voluntary dissolution may be considered.
Before proceeding, certain steps may be necessary, particularly regarding the company's assets, debts, contracts, and other obligations. Corporate authorizations and required government formalities must also be completed.
The dissolution procedures differ depending on whether the company is incorporated in Quebec or under the federal regime.
In summary , when a company ceases operations, a decision must be made as to whether it will remain inactive or be dissolved. As long as it legally exists, its obligations generally continue to apply. If the cessation of operations is permanent, it may be appropriate to initiate the necessary steps for its dissolution.