Can I sell my business if my Ontario corporation was dissolved?

A corporation dissolved by the Director is not necessarily gone for good. Ontario’s Business Corporations Act (OBCA) lets the Director revive it on application. This page covers Ontario corporations only.

How the Director dissolves a corporation

Under OBCA s.241(3), if a corporation fails to comply with a filing requirement under the Corporations Information Act, or fails to pay a fee required under the OBCA, the Director may give notice that a dissolving order will be issued unless it complies within 90 days after the notice is given. Section 241(1) and (2) add other grounds, including default under listed tax Acts. On default, s.241(4) lets the Director cancel the certificate of incorporation by order and, subject to s.241(5) and (9), the corporation is dissolved on the date fixed in the order.

What happens to its property

Under s.244(1), if a corporation is dissolved, any of its property that has not been disposed of on the date of dissolution immediately forfeits to and vests in the Crown. Section 244(2) makes an exception, with conditions, for a judgment, order, decision or land sale in a proceeding commenced in accordance with s.242, which allows a proceeding commenced by or against the corporation before dissolution to continue, and a proceeding to be brought against it, as if it had not been dissolved. Ask your lawyer what the corporation still held on the dissolution date.

Revival and what it restores

For a corporation dissolved under s.241(4) or a predecessor of it, s.241(9) says the Director may, in his or her discretion, on the application of any interested person, revive it. “Interested person” includes a director, officer and shareholder (s.241(9.1)). The application is in the form of articles of revival (s.241(13)) and cannot be made more than 20 years after the date of dissolution (s.241(12)). On revival the corporation is deemed for all purposes never to have been dissolved, subject to s.241(10) or (11), any terms and conditions the Director imposes, and rights acquired by any person during the period of dissolution.

Under s.241(10) and (11), if revival comes on or after the third anniversary the section names, forfeited property returns only as the Forfeited Corporate Property Act, 2015 or the Escheats Act, 2015 provides.

Before you list

• Search the corporation on the Ontario Business Registry, which says anyone can search it for free for basic information about a business.
• Ask your lawyer how revival is filed and how its timing fits with closing, since the Director may attach conditions.
• Tell the buyer about the dissolution and any revival. The buyer’s side is in does it matter if the seller’s corporation is not in good standing.