{"id":9360,"date":"2023-10-03T03:52:36","date_gmt":"2023-10-03T03:52:36","guid":{"rendered":"https:\/\/ownrblog-preprod.go-vip.net\/?p=9360"},"modified":"2023-12-07T14:06:37","modified_gmt":"2023-12-07T14:06:37","slug":"dissolving-a-corporation","status":"publish","type":"post","link":"https:\/\/www.ownr.co\/blog\/dissolving-a-corporation\/","title":{"rendered":"Should I Dissolve My Corporation if I\u2019m No Longer Operating It?"},"content":{"rendered":"

At Ownr, we help people start their businesses, but it\u2019s true that sometimes folks need to move on from what they\u2019ve started. Perhaps they\u2019ve incorporated, but never really got your business\u00a0 off the ground, or maybe the business is no longer viable. It can be a change in interests, or maybe the <\/span>business owner is retiring<\/span><\/a> and doesn\u2019t have a succession plan. Whatever the reason, business owners sometimes find themselves in the position of wanting to close up shop.\u00a0<\/span><\/p>\n

If you\u2019re in this situation and your business is incorporated, you have the option to dissolve it. However, there are some good reasons to keep your corporation, even if you\u2019re closing down your current business.\u00a0<\/span><\/p>\n

Dissolving a corporation is a legal process in which the corporation, as a legal entity, ceases to exist. An inactive corporation may just sound like a corporation that isn\u2019t currently being used, but in legal terms, it refers to a corporation that has ceased business operations but continues to exist as a legal entity.\u00a0<\/span><\/p>\n

While there is some upkeep involved in maintaining an inactive corporation, such as continuing to file your annual return and tax return even if you aren\u2019t generating revenue, but there are some real benefits to consider.\u00a0<\/span><\/p>\n

How do I decide if I should dissolve my corporation?\u00a0<\/span><\/h2>\n

Choosing whether to dissolve the corporation or maintain it will ultimately come down to a couple of factors.\u00a0<\/span><\/p>\n

If you\u2019re planning to start a new business or make some other pivot in your career, it might make sense to keep the corporation\u2014you can change the name and use it for your new business. This saves you the time and money involved in incorporating a new business. T<\/span>here could also be tax implications to dissolving immediately rather than maintaining your current corporation\u2014it\u2019s best to consult an accountant for a full picture of tax implications.<\/span><\/p>\n

If you aren\u2019t planning on being in business again and don\u2019t want to deal with the responsibility of keeping up with your annual filing requirements, the better choice for you may be to dissolve the corporation.<\/span><\/p>\n

How do I Dissolve a corporation?<\/span><\/h2>\n

The Government of Canada\u2019s <\/span>guide to dissolving a corporation<\/span><\/a> states that a corporation can apply to be dissolved once it has no property or liabilities. This could mean outstanding debt, loan repayment obligations, or land and office space owned by the corporation.<\/span><\/p>\n

Before you can dissolve your corporation, you must first go through a voluntary liquidation process that is approved by directors and shareholders. In short, the directors and shareholders need to agree on a plan to sell any property and pay back any liabilities. Once all property and liabilities are dealt with, the dissolution process is quite simple and straightforward.<\/span><\/p>\n

Your corporation\u2019s shareholders will have to pass a resolution approving the dissolution of the company. Dissolution resolutions will typically need to be prepared by a lawyer.<\/span>Once all property and liabilities are liquidated, you can submit your articles of dissolution to the government. Once the corporation is dissolved, a certificate of dissolution will be issued to confirm that the corporation no longer exists legally. Depending on your jurisdiction, this might be a physical or digital document. Regardless of the formatting, hold on to this document\u2014it can be used to inform banks, creditors, and other stakeholders that your corporation is now dissolved.<\/span><\/p>\n

Alternatives to dissolving a corporation<\/span><\/h2>\n

Closing your business doesn\u2019t necessarily mean you have to dissolve your corporation. If you\u2019re considering starting a new venture, maintaining your corporation can actually save you the time and money involved in setting up a brand new one.\u00a0\u00a0<\/span><\/p>\n

Maintaining your existing corporation can also be beneficial if you\u2019re applying for bank loans or other types of funding in the future. Many lenders will consider the age and history of your corporation when deciding on your eligibility.\u00a0<\/span><\/p>\n

If you\u2019re a <\/span>federal corporation<\/span><\/a>, Ownr can help you amend the name of your corporation. If you don\u2019t have a name for your next business yet, don\u2019t worry\u2014you can always change your existing name to a numbered corporation. You can also continue to complete your annual returns through your <\/span>Ownr subscription<\/span><\/a> to keep the legal status of your corporation active until you\u2019re ready to start your next venture.\u00a0<\/span>Finally, there may be <\/span>tax benefits<\/span><\/a> to maintaining a corporation, as well as mitigated risk and liability in your future business activities. Having a corporation already in place makes it easier to jump into your next business activities while enjoying the risk protection, liability mitigation, and tax benefits of this business structure.<\/span><\/p>\n

Can I incorporate again if I dissolve?<\/span><\/h2>\n

Yes, if you dissolve your corporation you still have the option to incorporate a new business in the future, so you can have access to all the benefits of incorporation again. However, it may be less costly to amend the name of your corporation. This is because there’s a fee associated with submitting your articles of dissolution, as well as with submitting new articles of incorporation to establish a new corporation.\u00a0<\/span><\/p>\n

Conclusion<\/span><\/h2>\n

A corporate business structure comes with many financial and legal benefits that can help a business grow. However, it also comes with more responsibility. If you\u2019re winding down your business and want to maintain your corporation, it\u2019s important to stay on top of filing your annual return and tax return. If you can commit to that, the perks of keeping your corporation may be well worth it. If you think it\u2019s time to close down your corporation, you can do so by going through the dissolution process. If you\u2019re ready to incorporate or register a new business, Ownr is here to help.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

If you\u2019re no longer conducting business activities, should your corporation be dissolved? We walk you through the decision.<\/p>\n","protected":false},"author":5,"featured_media":9361,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1016],"tags":[226,251],"class_list":["post-9360","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-acquiring","tag-corporation-documents","tag-dissolution"],"acf":[],"yoast_head":"\nShould I Dissolve My Corporation if I\u2019m No Longer Operating It? | Ownr Blog<\/title>\n<meta name=\"description\" content=\"If you\u2019re no longer conducting business activities, you might be thinking about dissolving a corporation. 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