Deciding to close a corporation is a real decision that deserves a real process. To dissolve a corporation in Ontario you pass a shareholders resolution, settle your debts and distribute any remaining assets, file Articles of Dissolution through the Ontario Business Registry, file a final T2 tax return, and close your CRA accounts. Do it properly and your obligations end cleanly. Walk away without dissolving and they do not.
Why formally dissolve instead of just stopping?
Many owners assume that once they stop invoicing and let the business go quiet, the corporation simply fades away. It does not. A corporation is a legal entity that continues to exist until it is formally dissolved — and while it exists, it keeps its obligations.
That means an inactive corporation still owes an annual return through the Ontario Business Registry each year, and in most cases still has to file a corporate tax return. Miss those and you can rack up penalties, or the province can eventually dissolve the corporation administratively — on its schedule, not yours, and often while your accounts and records are still tangled. Formal voluntary dissolution is the clean way out: you end the filing obligations deliberately, on your own terms.
If your goal is simply to keep the corporation alive for later use, that is a different plan — see our guide to the corporate minute book and annual return for what staying compliant requires. But if you are truly done, read on.
Before you dissolve
Dissolution is the last step, not the first. Before you file anything, get the corporation into a state where it can actually be wound up:
- Confirm the decision is authorized. For a corporation that has carried on business, the shareholders must approve the dissolution, typically by special resolution recorded in your minute book.
- Settle or provide for all debts and liabilities. This includes suppliers, loans, employee amounts, and taxes. Articles of Dissolution require that debts are paid or otherwise provided for.
- Collect what you are owed and sell or transfer assets. Turn the corporation's property into a form you can distribute.
- Distribute remaining assets to shareholders. After creditors are satisfied, any property left over is distributed among the shareholders. There should be nothing left inside the corporation when it dissolves.
- Empty and plan to close the corporate bank accounts. Money left in an account after the corporation ceases to exist becomes very difficult to recover.
Because the tax consequences of winding up — asset dispositions, final distributions, and how amounts flow out to shareholders — can be significant, this is the stage to involve an accountant or lawyer.
Step-by-step: how to close a corporation in Ontario
Here is the overall sequence at a glance.
| Step | What to do |
|---|---|
| 1. Authorize | Pass a directors and shareholders resolution approving dissolution; record it in the minute book. |
| 2. Wind down | Settle or provide for all debts, collect receivables, and sell or transfer assets. |
| 3. Distribute | Distribute any remaining assets to shareholders after creditors are paid. |
| 4. Get consent | Obtain the required consent to dissolution from the Ontario Ministry of Finance. |
| 5. File dissolution | File Articles of Dissolution through the Ontario Business Registry. |
| 6. Final tax filings | File the final T2 corporate return (and final HST and payroll filings). |
| 7. Close CRA accounts | Close your HST (RT), payroll (RP), and corporate income tax program accounts with the CRA. |
| 8. Keep records | Retain the minute book and financial records for the required period. |
Filing the Articles of Dissolution
The formal act of closing the corporation is filing Articles of Dissolution through the Ontario Business Registry — the same online system you used to incorporate and to file annual returns.
For most corporations there is an important prerequisite: a consent to dissolution from the Ontario Ministry of Finance, confirming your provincial tax accounts are in order. This consent can take several weeks to obtain, so build it into your timeline rather than treating dissolution as a same-day filing. There is also a government filing fee for the Articles of Dissolution. Fees and forms can change, so confirm the current fee and the exact consent requirement with your accountant or lawyer before you file.
Once the articles are accepted, the corporation is legally dissolved as of the effective date — and that is the date that anchors your final tax filings.
Your final tax filings
Dissolving with the province does not settle your account with the Canada Revenue Agency. You still owe a final T2 corporate income tax return covering the period up to the date of dissolution. The corporation's last tax year ends on that date, and the final T2 is generally due within six months of it.
Depending on your situation you may also need to file:
- A final HST return if the corporation was registered for HST.
- Final payroll filings — such as outstanding T4 slips — if you had employees.
Some owners also request a clearance certificate from the CRA before distributing assets, which confirms the corporation's taxes are paid. Because a wind-up return can involve terminal losses, recaptured depreciation, and gains on asset sales, this is squarely accountant territory — confirm what applies to you.
Closing your CRA program accounts
Filing your final returns is not the same as closing your accounts. Your business number carries program accounts — commonly an HST/RT account and, if you had staff, a payroll/RP account — and these need to be closed with the CRA once the corporation is dissolved and its final filings are done.
The province and the CRA operate separately: dissolving through the Ontario Business Registry does not automatically close your CRA accounts, and vice versa. You handle the CRA side directly. Confirm the current steps with the CRA or your accountant so nothing stays open under your business number after the company is gone.
Keep your records
Dissolution ends the corporation, but not your record-keeping duty. You must keep the corporation's records for the period the CRA requires — generally at least six years — even though the company no longer exists.
Hold on to the minute book, financial statements, tax returns, and the Articles of Dissolution themselves. If the CRA reviews a past year, or a question about the wind-up surfaces later, these records are your protection. Store them somewhere you will still be able to find them years from now.
Closing cleanly with Markham Office
Dissolving a corporation is not hard, but it is easy to do halfway — filing with the province while leaving CRA accounts open, or letting a corporation drift toward administrative dissolution instead of closing it on your terms. Either way, the loose ends can follow you.
Markham Office helps Ontario business owners with corporate changes, including winding down and dissolution, so the resolution, the Articles of Dissolution, and the final housekeeping line up in the right order. If you are ready to close a corporation — or not sure whether dissolving is the right move versus keeping it compliant — reach out through our registration services and we will help you map the cleanest path. For the alternative of staying active, our note on named versus numbered corporations is a useful companion.