Voluntarily Dissolving A Company In Alberta Means Legally Shutting It Down
When you no longer want to maintain an Alberta corporation, it must be dissolved. Dissolving Alberta corporations is the mechanism used to end the companies legal existence. After dissolving Alberta corporations, the corporation will have no further standing from a legal standpoint. While a corporation may be struck after three years of failing to file your annual corporate returns, there are many reasons as to why it is better to dissolve it.
How a Company Can Cease To Exist In Alberta
A company can cease to exist in Alberta through liquidation, dissolution or wind-up. As you will see, these mechanisms all have different scenarios where they are implemented. A corporate lawyer can help you further understand these scenarios but the basics are:
Liquidating An Alberta Corporation
A liquidation is a process of disposing a company’s assets and discharging its liabilities. Liquidation is a preliminary step that may, but does not necessarily, lead to dissolution. Liquidation is required first because after dissolving Alberta corporations, the corporation cannot legally transfer, sell, or dispose of any assets. This is because the company no longer exists after dissolution.
Dissolving Alberta Corporations
Dissolution puts an end to the legal existence of the company. In order to dissolve, a company must first complete the liquidation process. Once dissolved, it ceases to exist. If a company is dissolved by court order, then the dissolution will be effective as of the date of the order. There are several ways to dissolve a company including voluntary dissolution, court ordered dissolution or dissolution by the Alberta Corporate Registrar. For example, if a company fails to file annual returns for two consecutive years, the Alberta Corporate Registrar may dissolve it.
Winding Up Your Corporation
Winding up is similar to liquidation. It is the process leading up to the termination of a corporation’s business by the disposition of all of its assets and the discharge of its liabilities.
Voluntary Liquidation and Dissolution
In order to voluntarily dissolve a company the company must have no property and / or liabilities. The procedure to dissolve voluntarily is initiated by a director or shareholder proposal. A resolution of the directors ratifying the proposal is then required, as well as a “special resolution” of the shareholders. A special resolution is one which requires a voting threshold of over 66 – 2/3rd % for each class of shareholders, regardless of whether the class is a voting class or not.
After the shareholder resolutions are obtained from every class, a “Statement of Intent to Dissolve” is filed with the Registrar and a “Certificate of Intent to Dissolve” is then obtained from the Registrar. After the Certificate of Intent to Dissolve is issued, the company must send notice of intent to dissolve to each of its known creditors. It must also advertise the notice of the intent to dissolve in the Alberta Gazette, and at least once in a local newspaper where it has its registered office and in every jurisdiction where it carried on business. It also must dispose of its properties, discharge its liabilities, and distribute its remaining property among its shareholders.
After the company has complied with all of these matters, and if a Certificate of Intent to Dissolve has not been revoked, then the Articles of Dissolution are filed with the Corporate Registry and the Registrar issues a “Certificate of Dissolution”.
Reviving an Unintentionally Dissolved Company
Occasionally, a company is dissolved unintentionally. Due to oversight a company may fail to file its annual returns. In these circumstances, directors and shareholders may wish to revive the company’s existence by making an application to the Registrar. The applicant must also file articles of revival and an original NUANS name search report indicating that the name of the company is available. The company is then revived on the date shown on the certificate and will be subject to any reasonable terms imposed by the Registrar.
Help Dissolving Alberta Corporations Is Right In Calgary
The corporate and business lawyers at Kahane Law Office in Calgary, Alberta can help you to effectively wind-up or dissolve your company and protect you and guard against unnecessary risk. Call us today at 403-225-8810 in Calgary, Alberta) or email us directly here.