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DISSOLUTION KIT
FOR BRITISH COLUMBIA
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Table of Contents

Introduction Options for Dissolving a Company Effect of Dissolution Steps and Documents Dissolution Document Templates for easy use

3 4 5 6 Included

Copyright 2009 by Simply Legal Inc. All rights reserved. First edition, 2009. No part of this Kit may be reproduced or transmitted in any form by any means graphic, electronic, or mechanical without permission in writing from the publisher. Purchase of this Kit grants the purchaser a single license to use the forms and sample templates included in this Kit for one corporation only.

Part 1 Options for Dissolving a Company

Under the Business Corporation Act of British Columbia, a corporation can be dissolved by failing to comply with its annual filing requirements or by requesting a dissolution or as part of a voluntary or court ordered liquidation. Liquidation is the process of winding up a corporation that has assets and debts, obligations and/or liabilities. Dissolutions by way of liquidations fall outside of the scope of this Kit so only the first two options will be discussed below. For liquidations you should obtain legal advice from a qualified professional. 1. Dissolutions for Non-Compliance

A British Columbia corporation must file an Annual Report with the British Columbia Corporate Registry (hereinafter called the Corporate Registry) each year to stay in good standing. The Annual Report is a corporate filing and should not be confused with a corporations tax return filing. Annual Reports must be filed at the Corporate Registrys corporate filing website. This is a simple filing whereby you notify the Corporate Registry whether or not there have been any changes to your corporations officers since its last filing. A corporation has only 2 months after the anniversary date of its incorporation to file its Annual Report. If a corporation fails to do so, the corporation will no longer be in good standing with the Corporate Registry and if a corporation fails to file an Annual Report in 2 consecutive years the Corporate Registry will take action to strike the corporation from its Corporate Register and will dissolve the corporation. A corporation may decide to simply stop filing its Annual Reports and to wait for the Corporate Registry to dissolve it for non-compliance rather than requesting its dissolution. This is sometimes called, letting it die. 2. Dissolutions by Request

A corporation can be dissolved by filing an Application for (Voluntary) Dissolution with the Corporate Registry. Applications are filed online at the Corporate Registrys Corporate Online website. Only solvent corporations can be dissolved by filing an application for dissolution. If a corporation is insolvent, the requirements under the Bankruptcy and Insolvency Act or the Winding-up and Restructuring Act, or their successor legislation, may apply. Under the Business Corporations Act, a corporation is insolvent if it is unable to pay its debts as they become due in the normal course of its business. If your corporation is insolvent you should obtain legal advice from a qualified professional.

Simply Legal Inc. Copyright 2009

Part 2 Effect of Dissolution

1. Termination of Corporate Existence

Upon its dissolution a corporation ceases to exist and, consequently, is no longer able to carry on business or own or dispose of assets. 2. Ownership of Assets

If a corporation that dissolves has any assets at the time of its dissolution, pursuant to the Business Corporations Act each of its assets will automatically vest with the government unless: (a) (b) the asset is held under a joint tenancy, in which case ownership of such asset will vest with the other joint tenant(s); or the asset is land located in British Columbia, in which case ownership of the land will escheat to the government pursuant to the Escheats Act of British Columbia unless (a) above applies.

Assets include any and all interests and entitlements, such as future payments, contractual rights and tax refunds or credits. 3. Liabilities and Law Suits

The liability of each director, officer and shareholder of a corporation that is dissolved continues and may be enforced as if the corporation had not been dissolved. Also, despite the dissolution of a corporation, a legal proceeding commenced by or against the corporation before its dissolution may be continued as if the corporation had not been dissolved and a legal proceeding may be brought against the corporation within 2 years after its dissolution as if the corporation had not been dissolved. If some or all of a corporations assets were distributed in anticipation of, during or as a result of the corporations dissolution to any of its shareholders a court in a legal proceeding commenced against a dissolved corporation may add such shareholders to the legal proceeding and decide how much liability to assess to each in respect of such proceeding, which may include liability to judgement creditors of the dissolved corporation. 4. Tax Year End

The dissolution of a corporation will also trigger a tax year end for the corporation. A corporate tax return must be filed with Canada Revenue Agency within 6 months of a corporations dissolution.

In Part 3 well take a close look at the steps and documents that are required to properly dissolve your corporation.

Simply Legal Inc. Copyright 2009