What is the voluntary dissolution of a business corporation? | ScriptaLegal
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Frequently asked questions > Company > Business Corporation > What is the voluntary dissolution of a business corporation?

What is the voluntary dissolution of a business corporation?

Voluntary dissolution is the simplest procedure and is made further to the issuance of a certificate of dissolution delivered by the Québec enterprise registrar or by Corporations-Canada according to the jurisdiction under which the business corporation was constituted (being incorporated as for the federal jurisdiction).

In Quebec, voluntary dissolution is made further to the approval of the shareholders by a special resolution, by the sole consent of the directors or by a declaration of dissolution made by the sole shareholder. In the case of a dissolution by the sole consent of the directors, the business corporation has to have neither obligation, nor property, nor a shareholder. Dissolution of the business corporation with the approval of the shareholders requires that it is beforehand liquidated, if it has obligations or property. The business corporation can also be dissolved by decision of a court in accordance with the provisions provided for that purpose in the Quebec Business Corporations Act.

In Canada, a business corporation which has not issued any shares, that is to say before it begins its operations, can be dissolved by a resolution of all the directors. A business corporation which has no property and no liabilities can be dissolved by a special resolution of the shareholders or, where it has issued more than one class of shares, by a special resolution of the holders of each class whether or not they are entitled to vote. The business corporation which has property or liabilities or both can be dissolved by a special resolution of the shareholders or, where it has issued more than one class of shares, by a special resolution of the holders of each class whether or not they are entitled to vote, if : on one hand, these resolutions authorize the directors to make a distribution of property and a settlement of debts; and on the other hand, the business corporation has made a distribution of property and a settlement of debts before sending the articles of dissolution to the director of Corporations-Canada. The director of Corporations-Canada can also dissolve a business corporation by virtue of the provisions provided for that purpose in the Canada Business Corporations Act.

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