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  ONTARIO BUSINESS CORPORATIONS ACT 05/12/2009

Important Notice:  The following statute is subject to amendment and legislative changes, so particular attention should be directed to the date of the statute, with reference being made to the official government website for the most current version of a statute at www.e-laws.gov.on.ca.

PART XVI

LIQUIDATION AND DISSOLUTION

Definition
191. In sections 193 to 236,
“contributory” means a person who is liable to contribute to the property of a corporation in the event of the corporation being wound up under this Act. R.S.O. 1990, c. B.16, s. 191.
Application of ss. 193-205
192. Sections 193 to 205 apply to corporations being wound up voluntarily. R.S.O. 1990, c. B.16, s. 192.
Voluntary winding up
193. (1) The shareholders of a corporation may, by special resolution, require the corporation to be wound up voluntarily. R.S.O. 1990, c. B.16, s. 193 (1).
Appointment of liquidator
(2) At such meeting, the shareholders shall appoint one or more persons, who may be directors, officers or employees of the corporation, as liquidator of the estate and effects of the corporation for the purpose of winding up its business and affairs and distributing its property, and may at that or any subsequent meeting fix the liquidator’s remuneration and the costs, charges and expenses of the winding up. R.S.O. 1990, c. B.16, s. 193 (2).
Review of remuneration by court
(3) On the application of any shareholder or creditor of the corporation or of the liquidator, the court may review the remuneration of the liquidator and, whether or not the remuneration has been fixed in accordance with subsection (2), the court may fix and determine the remuneration at such amount as it thinks proper. R.S.O. 1990, c. B.16, s. 193 (3).
Publication of notice
(4) A corporation shall file notice, in the prescribed form, of a resolution requiring the voluntary winding up of the corporation with the Director within ten days after the resolution has been passed and shall publish the notice in The Ontario Gazette within twenty days after the resolution has been passed. R.S.O. 1990, c. B.16, s. 193 (4).
Inspectors
194. The shareholders of a corporation being wound up voluntarily may delegate to any committee of shareholders, contributories or creditors, hereinafter referred to as inspectors, the power of appointing the liquidator and filling any vacancy in the office of liquidator, or may enter into any arrangement with creditors of the corporation with respect to the powers to be exercised by the liquidator and the manner in which they are to be exercised. R.S.O. 1990, c. B.16, s. 194.
Vacancy in office of liquidator
195. If a vacancy occurs in the office of liquidator by death, resignation or otherwise, the shareholders may, subject to any arrangement the corporation may have entered into with its creditors upon the appointment of inspectors, fill such vacancy, and a meeting for that purpose may be called by the continuing liquidator, if any, or by any shareholder or contributory, and shall be deemed to have been duly held if called in the manner prescribed by the articles or by-laws of the corporation, or, in default thereof, in the manner prescribed by this Act for calling meetings of the shareholders of the corporation. R.S.O. 1990, c. B.16, s. 195.
Removal of liquidator
196. The shareholders of a corporation may by ordinary resolution passed at a meeting called for that purpose remove a liquidator appointed under section 193, 194 or 195, and in such case shall appoint a replacement. R.S.O. 1990, c. B.16, s. 196.
Commencement of winding up
197. A voluntary winding up commences at the time of the passing of the resolution requiring the winding up or at such later time as may be specified in the resolution. R.S.O. 1990, c. B.16, s. 197.
Corporation to cease business
198. A corporation being wound up voluntarily shall, from the commencement of its winding up, cease to carry on its undertaking, except in so far as may be required as beneficial for the winding up thereof, and all transfers of shares, except transfers made to or with the sanction of the liquidator taking place after the commencement of its winding up, are void, but its corporate existence and all its corporate powers, even if it is otherwise provided by its articles or by-laws, continue until its affairs are wound up. R.S.O. 1990, c. B.16, s. 198.
No proceedings against corporation after voluntary winding up except by leave
199. After the commencement of a voluntary winding up,
(a) no action or other proceeding shall be commenced against the corporation; and
(b) no attachment, sequestration, distress or execution shall be put in force against the estate or effects of the corporation,
except by leave of the court and subject to such terms as the court imposes. R.S.O. 1990, c. B.16, s. 199.
List of contributories and calls
200. (1) Upon a voluntary winding up, the liquidator,
(a) shall settle the list of contributories; and
(b) may, before the liquidator has ascertained the sufficiency of the property of the corporation, call on all or any of the contributories for the time being settled on the list of contributories to the extent of their liability to pay any sum that the liquidator considers necessary for satisfying the liabilities of the corporation and the costs, charges and expenses of winding up and for adjusting the rights of the contributories among themselves. R.S.O. 1990, c. B.16, s. 200 (1).
List is proof
(2) A list settled by the liquidator under clause (1) (a) is, in the absence of evidence to the contrary, proof of the liability of the persons named therein to be contributories. R.S.O. 1990, c. B.16, s. 200 (2).
Default on calls
(3) The liquidator in making a call under clause (1) (b) may take into consideration the probability that some of the contributories upon whom the call is made may partly or wholly fail to pay their respective portions of the call. R.S.O. 1990, c. B.16, s. 200 (3).
Meetings of corporation during winding up
201. (1) The liquidator may, during the continuance of the voluntary winding up, call meetings of the shareholders of the corporation for any purpose the liquidator thinks fit. R.S.O. 1990, c. B.16, s. 201 (1).
Where winding up continues more than one year
(2) Where a voluntary winding up continues for more than one year, the liquidator shall call a meeting of the shareholders of the corporation at the end of the first year and of each succeeding year from the commencement of the winding up, and the liquidator shall lay before the meeting an account showing the liquidator’s acts and dealings and the manner in which the winding up has been conducted during the immediately preceding year. R.S.O. 1990, c. B.16, s. 201 (2).
Arrangements with creditors
202. The liquidator, with the approval of the shareholders of the corporation or the inspectors, may make such compromise or other arrangement as the liquidator thinks expedient with any creditor or person claiming to be a creditor or having or alleging that he, she or it has a claim, present or future, certain or contingent, liquidated or unliquidated, against the corporation or whereby the corporation may be rendered liable. R.S.O. 1990, c. B.16, s. 202.
Power to compromise with debtors and contributories
203. The liquidator may, with the approval referred to in section 202, compromise all debts and liabilities capable of resulting in debts, and all claims, whether present or future, certain or contingent, liquidated or unliquidated, subsisting or supposed to subsist between the corporation and any contributory, alleged contributory or other debtor or person who may be liable to the corporation and all questions in any way relating to or affecting the property of the corporation, or the winding up of the corporation, upon the receipt of such sums payable at such times and generally upon such terms as are agreed, and the liquidator may take any security for the discharge of such debts or liabilities and give a complete discharge in respect thereof. R.S.O. 1990, c. B.16, s. 203.
Power to accept shares, etc., as consideration for sale of property to another body corporate
204. (1) Where a corporation is proposed to be or is in the course of being wound up voluntarily and it is proposed to transfer the whole or a portion of its business or property to another body corporate, the liquidator, with the approval of a resolution of the shareholders of the corporation conferring either a general authority on the liquidator or an authority in respect of any particular arrangement, may receive, in compensation or in part-compensation for the transfer, cash or shares or other like interest in the purchasing body corporate or any other body corporate for the purpose of distribution among the creditors or shareholders of the corporation that is being wound up in the manner set forth in the arrangement, or may, in lieu of receiving cash or shares or other like interest, or in addition thereto, participate in the profits of or receive any other benefit from the purchasing body corporate or any other body corporate. R.S.O. 1990, c. B.16, s. 204 (1).
Confirmation of sale or arrangement
(2) A transfer made or arrangement entered into by the liquidator under this section is not binding on the shareholders of the corporation that is being wound up unless the transfer or arrangement is approved in accordance with subsections 184 (3), (6) and (7). R.S.O. 1990, c. B.16, s. 204 (2).
Where resolution not invalid
(3) No resolution is invalid for the purposes of this section because it was passed before or concurrently with a resolution for winding up the corporation or for appointing the liquidator. R.S.O. 1990, c. B.16, s. 204 (3).
Account of voluntary winding up to be made by liquidator to a meeting
205. (1) The liquidator shall make up an account showing the manner in which the winding up has been conducted and the property of the corporation disposed of, and thereupon shall call a meeting of the shareholders of the corporation for the purpose of having the account laid before them and hearing any explanation that may be given by the liquidator, and the meeting shall be called in the manner prescribed by the articles or by-laws or, in default thereof, in the manner prescribed by this Act for the calling of meetings of shareholders. R.S.O. 1990, c. B.16, s. 205 (1).
Notice of holding of meeting
(2) The liquidator shall within ten days after the meeting is held file a notice in the prescribed form with the Director stating that the meeting was held and the date thereof and shall forthwith publish the notice in The Ontario Gazette. R.S.O. 1990, c. B.16, s. 205 (2).
Dissolution
(3) Subject to subsection (4), on the expiration of three months after the date of the filing of the notice, the corporation is dissolved. R.S.O. 1990, c. B.16, s. 205 (3).
Extension
(4) At any time during the three-month period mentioned in subsection (3), the court may, on the application of the liquidator or any other person interested, make an order deferring the date on which the dissolution of the corporation is to take effect to a date fixed in the order, and in such event the corporation is dissolved on the date so fixed. R.S.O. 1990, c. B.16, s. 205 (4).
Dissolution by court order
(5) Despite anything in this Act, the court at any time after the affairs of the corporation have been fully wound up may, upon the application of the liquidator or any other person interested, make an order dissolving it, and it is dissolved on the date fixed in the order. R.S.O. 1990, c. B.16, s. 205 (5).
Copy of extension order to be filed
(6) The person on whose application an order was made under subsection (4) or (5) shall within ten days after it was made file with the Director a certified copy of the order and forthwith publish notice of the order in The Ontario Gazette. R.S.O. 1990, c. B.16, s. 205 (6).
Application of ss. 207-218
206. Sections 207 to 218 apply to corporations being wound up by order of the court. R.S.O. 1990, c. B.16, s. 206.
Winding up by court
207. (1) A corporation may be wound up by order of the court,
(a) where the court is satisfied that in respect of the corporation or any of its affiliates,
(i) any act or omission of the corporation or any of its affiliates effects a result,
(ii) the business or affairs of the corporation or any of its affiliates are or have been carried on or conducted in a manner, or
(iii) the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner,
that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer; or
(b) where the court is satisfied that,
(i) a unanimous shareholder agreement entitled a complaining shareholder to demand dissolution of the corporation after the occurrence of a specified event and that event has occurred,
(ii) proceedings have been begun to wind up voluntarily and it is in the interest of contributories and creditors that the proceedings should be continued under the supervision of the court,
(iii) the corporation, though it may not be insolvent, cannot by reason of its liabilities continue its business and it is advisable to wind it up, or
(iv) it is just and equitable for some reason, other than the bankruptcy or insolvency of the corporation, that it should be wound up; or
(c) where the shareholders by special resolution authorize an application to be made to the court to wind up the corporation. R.S.O. 1990, c. B.16, s. 207 (1).
Court order
(2) Upon an application under this section, the court may make such order under this section or section 248 as it thinks fit. R.S.O. 1990, c. B.16, s. 207 (2).
Who may apply
208. (1) A winding-up order may be made upon the application of the corporation or of a shareholder or, where the corporation is being wound up voluntarily, of the liquidator or of a contributory or of a creditor having a claim of $2,500 or more. R.S.O. 1990, c. B.16, s. 208 (1).
Notice
(2) Except where the application is made by the corporation, four days’ notice of the application shall be given to the corporation before the making of the application. R.S.O. 1990, c. B.16, s. 208 (2).
Power of court
209. The court may make the order applied for, may dismiss the application with or without costs, may adjourn the hearing conditionally or unconditionally or may make any interim or other order as is considered just, and upon the making of the order may, according to its practice and procedure, refer the proceedings for the winding up to an officer of the court for inquiry and report and may authorize the officer to exercise such powers of the court as are necessary for the reference. R.S.O. 1990, c. B.16, s. 209.
Appointment of liquidator
210. (1) The court in making the winding-up order may appoint one or more persons as liquidator of the estate and effects of the corporation for the purpose of winding up its business and affairs and distributing its property. R.S.O. 1990, c. B.16, s. 210 (1).
Remuneration
(2) The court may at any time fix the remuneration of the liquidator. R.S.O. 1990, c. B.16, s. 210 (2).
Vacancy
(3) If a liquidator appointed by the court dies or resigns or the office becomes vacant for any reason, the court may by order fill the vacancy. R.S.O. 1990, c. B.16, s. 210 (3).
Notice of appointment
(4) A liquidator appointed by the court under this section shall forthwith give to the Director notice in the prescribed form of the liquidator’s appointment and shall, within twenty days after being appointed publish the notice in The Ontario Gazette. R.S.O. 1990, c. B.16, s. 210 (4).
Removal of liquidator
211. The court may by order remove for cause a liquidator appointed by it, and in such case shall appoint a replacement. R.S.O. 1990, c. B.16, s. 211.
Costs and expenses
212. The costs, charges and expenses of a winding up by order of the court shall be assessed by an assessment officer of the Superior Court of Justice. R.S.O. 1990, c. B.16, s. 212; 2001, c. 9, Sched. D, s. 2 (4).
Commencement of winding up
213. Where a winding-up order is made by the court without prior voluntary winding-up proceedings, the winding up shall, unless a court otherwise orders, be deemed to commence at the time of the service of notice of the application, and, where the application is made by the corporation, at the time the application is made. R.S.O. 1990, c. B.16, s. 213.
Proceedings in winding up after order
214. Where a winding-up order has been made by the court, proceedings for the winding up of the corporation shall be taken in the same manner and with the like consequences as provided for a voluntary winding up, except that the list of contributories shall be settled by the court unless it has been settled by the liquidator before the winding-up order, in which case the list is subject to review by the court, and except that all proceedings in the winding up are subject to the order and direction of the court. R.S.O. 1990, c. B.16, s. 214.
Orders following winding-up order
Meetings of shareholders
215. (1) Where a winding-up order has been made by the court, the court may direct meetings of the shareholders of the corporation to be called, held and conducted in such manner as the court thinks fit for the purpose of ascertaining their wishes, and may appoint a person to act as chair of any such meeting and to report the result of it to the court. R.S.O. 1990, c. B.16, s. 215 (1).
Order for delivery by contributories and others of property, etc.
(2) Where a winding-up order has been made by the court, the court may require any contributory for the time being settled on the list of contributories, or any director, officer, employee, trustee, banker or agent of the corporation to pay, deliver, convey, surrender or transfer forthwith, or within such time as the court directs, to the liquidator any sum or balance, documents, records, estate or effects that are in his, her or its hands and to which the corporation is apparently entitled. R.S.O. 1990, c. B.16, s. 215 (2).
Inspection of documents and records
(3) Where a winding-up order has been made by the court, the court may make an order for the inspection of the documents and records of the corporation by its creditors and contributories, and any documents and records in the possession of the corporation may be inspected in conformity with the order. R.S.O. 1990, c. B.16, s. 215 (3).
Proceedings against corporation after court winding up
216. After the commencement of a winding up by order of the court,
(a) no action or other proceeding shall be proceeded with or commenced against the corporation; and
(b) no attachment, sequestration, distress or execution shall be put in force against the estate or effects of the corporation,
except by leave of the court and subject to such terms as the court imposes. R.S.O. 1990, c. B.16, s. 216.
Provision for discharge and distribution by the court
217. (1) Where the realization and distribution of the property of a corporation being wound up under an order of the court has proceeded so far that in the opinion of the court it is expedient that the liquidator should be discharged and that the property of the corporation remaining in the liquidator’s hands can be better realized and distributed by the court, the court may make an order discharging the liquidator and for payment, delivery and transfer into court, or to such person as the court directs, of such property, and it shall be realized and distributed by or under the direction of the court among the persons entitled thereto in the same way as nearly as may be as if the distribution were being made by the liquidator. R.S.O. 1990, c. B.16, s. 217 (1).
Disposal of documents and records
(2) In such case, the court may make an order directing how the documents and records of the corporation and of the liquidator are to be disposed of, and may order that they be deposited in court or otherwise dealt with as the court thinks fit. R.S.O. 1990, c. B.16, s. 217 (2).
Order for dissolution
218. (1) The court at any time after the business and affairs of the corporation have been fully wound up may, upon the application of the liquidator or any other person interested, make an order dissolving it, and it is dissolved on the date fixed in the order. R.S.O. 1990, c. B.16, s. 218 (1).
Copy of dissolution order to be filed
(2) The person on whose application the order was made shall within ten days after it was made file with the Director a certified copy of the order and shall forthwith publish notice of the order in The Ontario Gazette. R.S.O. 1990, c. B.16, s. 218 (2).
Application of ss. 220-236
219. Sections 220 to 236 apply to corporations being wound up voluntarily or by order of the court. R.S.O. 1990, c. B.16, s. 219.
Where no liquidator
220. Where there is no liquidator,
(a) the court may by order on the application of a shareholder of the corporation appoint one or more persons as liquidator; and
(b) the estate and effects of the corporation shall be under the control of the court until the appointment of a liquidator. R.S.O. 1990, c. B.16, s. 220.
Consequences of winding up
221. (1) Upon a winding up,
(a) the liquidator shall apply the property of the corporation in satisfaction of all its debts, obligations and liabilities and, subject thereto, shall distribute the property rateably among the shareholders according to their rights and interests in the corporation;
(b) in distributing the property of the corporation, debts to employees of the corporation for services performed for it due at the commencement of the winding up or within one month before, not exceeding three months’ wages and vacation pay accrued for not more than twelve months, shall be paid in priority to the claims of the ordinary creditors, and such persons are entitled to rank as ordinary creditors for the residue of their claims;
(c) all the powers of the directors cease upon the appointment of a liquidator, except in so far as the liquidator may sanction the continuance of such powers. R.S.O. 1990, c. B.16, s. 221 (1).
Distribution of property
(2) Section 53 of the Trustee Act applies with necessary modifications to liquidators. R.S.O. 1990, c. B.16, s. 221 (2).
Payment of costs and expenses
222. The costs, charges and expenses of a winding up, including the remuneration of the liquidator, are payable out of the property of the corporation in priority to all other claims. R.S.O. 1990, c. B.16, s. 222.
Powers of liquidators
223. (1) A liquidator may,
(a) bring or defend any action, suit or prosecution, or other legal proceedings, civil or criminal, in the name and on behalf of the corporation;
(b) carry on the business of the corporation so far as may be required as beneficial for the winding up of the corporation;
(c) sell the property of the corporation by public auction or private sale and receive payment of the purchase price either in cash or otherwise;
(d) do all acts and execute, in the name and on behalf of the corporation, all documents, and for that purpose use the seal of the corporation, if any;
(e) draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the corporation;
(f) raise upon the security of the property of the corporation any requisite money;
(g) take out in the liquidator’s official name letters of administration of the estate of any deceased contributory and do in the liquidator’s official name any other act that is necessary for obtaining payment of any money due from a contributory or from the contributory’s estate and which act cannot be done conveniently in the name of the corporation; and
(h) do and execute all such other things as are necessary for winding up the business and affairs of the corporation and distributing its property. R.S.O. 1990, c. B.16, s. 223 (1).
Bills of exchange, etc., to be deemed drawn in the course of business
(2) The drawing, accepting, making or endorsing of a bill of exchange or promissory note by the liquidator on behalf of a corporation has the same effect with respect to the liability of the corporation as if such bill or note had been drawn, accepted, made or endorsed by or on behalf of the corporation in the course of carrying on its business. R.S.O. 1990, c. B.16, s. 223 (2).
Where money deemed to be due to liquidator
(3) Where the liquidator takes out letters of administration or otherwise uses the liquidator’s official name for obtaining payment of any money due from a contributory, such money shall be deemed, for the purpose of enabling the liquidator to take out such letters or recover such money, to be due to the liquidator rather than to the corporation. R.S.O. 1990, c. B.16, s. 223 (3).
What liquidator may rely upon
(4) A liquidator who acts in good faith is entitled to rely upon,
(a) financial statements of the corporation represented to the liquidator by an officer of the corporation or in a written report of the auditor of the corporation to present fairly the financial position of the corporation in accordance with generally accepted accounting principles; or
(b) an opinion, a report or a statement of a lawyer, an accountant, an engineer, an appraiser or other professional adviser retained by the liquidator. R.S.O. 1990, c. B.16, s. 223 (4).
Acts by more than one liquidator
224. Where more than one person is appointed as liquidator, any power conferred by sections 193 to 236 on a liquidator may be exercised by such one or more of such persons as may be determined by the resolution or order appointing them or, in default of such determination, by any number of them not fewer than two. R.S.O. 1990, c. B.16, s. 224.
Nature of liability of contributory
225. The liability of a contributory creates a debt accruing due from the contributory at the time the contributory’s liability commenced, but payable at the time or respective times when calls are made for enforcing such liability. R.S.O. 1990, c. B.16, s. 225.
Liability in case of contributory’s death
226. If a contributory dies before or after having been placed on the list of contributories, the contributory’s personal representative is liable in due course of administration to contribute to the property of the corporation in discharge of the liability of the deceased contributory and shall be a contributory accordingly. R.S.O. 1990, c. B.16, s. 226.
Deposit of money
227. (1) The liquidator shall deposit all money that the liquidator has belonging to the corporation and amounting to $100 or more in any bank of Canada listed in Schedule I or II to the Bank Act (Canada) or in any trust corporation or loan corporation that is registered under the Loan and Trust Corporations Act or in any other depository approved by the court. R.S.O. 1990, c. B.16, s. 227 (1); 2002, c. 8, Sched. I, s. 2.
Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 181 (2) and the following substituted:

Deposit of money
(1) The liquidator shall deposit all money that the liquidator has belonging to the corporation and amounting to $100 or more in a financial institution described in subsection (2). 2007, c. 7, Sched. 7, s. 181 (2).
See: 2007, c. 7, Sched. 7, ss. 181 (2), 192 (2).

Approval by inspectors
(2) If inspectors have been appointed, the depository under subsection (1) shall be one approved by them. R.S.O. 1990, c. B.16, s. 227 (2).
Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 181 (2) and the following substituted:

Financial institutions
(2) A financial institution referred to in subsection (1) is,
(a) a bank or authorized foreign bank within the meaning of section 2 of the Bank Act (Canada);
(b) a corporation registered under the Loan and Trust Corporations Act;
(c) a credit union within the meaning of the Credit Unions and Caisses Populaires Act, 1994; or
(d) a retail association as defined under the Cooperative Credit Associations Act (Canada). 2007, c. 7, Sched. 7, s. 181 (2).
See: 2007, c. 7, Sched. 7, ss. 181 (2), 192 (2).

Separate deposit account to be kept; withdrawal from account
(3) Such deposit shall not be made in the name of the liquidator individually, but a separate deposit account shall be kept of the money belonging to the corporation in the liquidator’s name as liquidator of the corporation and in the name of the inspectors, if any, and such money shall be withdrawn only by order for payment signed by the liquidator and one of the inspectors, if any. R.S.O. 1990, c. B.16, s. 227 (3).
Liquidator to produce bank pass-book
(4) At every meeting of the shareholders of the corporation, the liquidator shall produce a pass-book, or statement of account showing the amount of the deposits, the dates at which they were made, the amounts withdrawn and the dates of withdrawal, and mention of such production shall be made in the minutes of the meeting, and the absence of such mention is admissible in evidence as proof, in the absence of evidence to the contrary, that the pass-book or statement of account was not produced at the meeting. R.S.O. 1990, c. B.16, s. 227 (4).
Idem
(5) The liquidator shall also produce the pass-book or statement of account whenever so ordered by the court upon the application of the inspectors, if any, or of a shareholder of the corporation. R.S.O. 1990, c. B.16, s. 227 (5).
Proving claim
228. For the purpose of proving claims, sections 23, 24 and 25 of the Assignments and Preferences Act apply with necessary modifications, except that where the word “judge” is used therein, the word “court” as used in this Act shall be substituted. R.S.O. 1990, c. B.16, s. 228.
Application for direction
229. Upon the application of the liquidator or of the inspectors, if any, or of any creditors, the court, after hearing such parties as it directs to be notified or after such steps as the court prescribes have been taken, may by order give its direction in any matter arising in the winding up. R.S.O. 1990, c. B.16, s. 229.
Examination of persons as to estate
230. (1) The court may at any time after the commencement of the winding up summon to appear before the court or liquidator any director, officer or employee of the corporation or any other person known or suspected of having possession of any of the estate or effects of the corporation, or alleged to be indebted to it, or any person whom the court thinks capable of giving information concerning its trade, dealings, estate or effects. R.S.O. 1990, c. B.16, s. 230 (1).
Damages against delinquent directors, etc.
(2) Where in the course of the winding up it appears that a person who has taken part in the formation or promotion of the corporation or that a past or present director, officer, employee, liquidator or receiver of the corporation has misapplied or retained in that person’s own hands, or become liable or accountable for, property of the corporation, or has committed any misfeasance or breach of trust in relation to it, the court may, on the application of the liquidator or of any creditor, shareholder or contributory, examine the conduct of that person and order that person to restore the property so misapplied or retained, or for which that person has become liable or accountable, or to contribute such sum to the property of the corporation by way of compensation in respect of such misapplication, retention, misfeasance or breach of trust, or both, as the court thinks just. R.S.O. 1990, c. B.16, s. 230 (2).
Proceedings by shareholders
231. (1) Where a shareholder of the corporation desires to cause any proceeding to be taken that, in the shareholder’s opinion, would be for the benefit of the corporation, and the liquidator, under the authority of the shareholders or of the inspectors, if any, refuses or neglects to take such proceeding after being required so to do, the shareholder may obtain an order of the court authorizing the shareholder to take such proceeding in the name of the liquidator or corporation, but at the shareholder’s own expense and risk, upon such terms and conditions as to indemnity to the liquidator or corporation as the court prescribes. R.S.O. 1990, c. B.16, s. 231 (1).
Benefits: when for shareholders
(2) Any benefit derived from a proceeding under subsection (1) belongs exclusively to the shareholder causing the institution of the proceeding for the shareholder’s benefit and that of any other shareholder who has joined together in causing the institution of the proceeding. R.S.O. 1990, c. B.16, s. 231 (2).
when for corporation
(3) If, before the order is granted, the liquidator signifies to the court the liquidator’s readiness to institute the proceeding for the benefit of the corporation, the court shall make an order prescribing the time within which the liquidator is to do so, and in that case the advantage derived from the proceeding, if instituted within such time, belongs to the corporation. R.S.O. 1990, c. B.16, s. 231 (3).
Rights conferred by Act to be in addition to other powers
232. The rights conferred by this Act are in addition to any other right to institute a proceeding against any contributory, or against any debtor of the corporation, for the recovery of any sum due from such contributory or debtor or an estate thereof. R.S.O. 1990, c. B.16, s. 232.
Stay of winding up proceedings
233. At any time during a winding up, the court, upon the application of a shareholder, creditor or contributory and upon proof to its satisfaction that all proceedings in relation to the winding up ought to be stayed, may make an order staying the proceedings altogether or for a limited time on such terms and subject to such conditions as the court thinks fit. R.S.O. 1990, c. B.16, s. 233.
Where creditor unknown
234. (1) Where the liquidator is unable to pay all the debts of the corporation because a creditor is unknown or a creditor’s whereabouts is unknown, the liquidator may, by agreement with the Public Trustee, pay to the Public Trustee an amount equal to the amount of the debt due to the creditor to be held in trust for the creditor, and thereupon subsections 238 (5) and (6) apply thereto. R.S.O. 1990, c. B.16, s. 234 (1).
Idem
(2) A payment under subsection (1) shall be deemed to be in satisfaction of the debt for the purposes of winding up. R.S.O. 1990, c. B.16, s. 234 (2).
Where shareholder unknown
235. (1) Where the liquidator is unable to distribute rateably the property of the corporation among the shareholders because a shareholder is unknown or a shareholder’s whereabouts is unknown, the share of the property of the corporation of such shareholder may, by agreement with the Public Trustee, be delivered or conveyed by the liquidator to the Public Trustee to be held in trust for the shareholder, and thereupon subsections 238 (5) and (6) apply thereto. R.S.O. 1990, c. B.16, s. 235 (1).
Idem
(2) A delivery or conveyance under subsection (1) shall be deemed to be a distribution to that shareholder of his, her or its rateable share for the purposes of the winding up. R.S.O. 1990, c. B.16, s. 235 (2).
Disposal of records, etc., after winding up
236. (1) Where a corporation has been wound up under sections 192 to 235 and is about to be dissolved, its documents and records and those of the liquidator may be disposed of as it by resolution directs in case of voluntary winding up, or as the court directs in case of winding up under an order. R.S.O. 1990, c. B.16, s. 236 (1).
When responsibility as to custody of records, etc., to cease
(2) After the expiration of five years after the date of the dissolution of the corporation, no responsibility rests on it or the liquidator, or anyone to whom the custody of the documents and records has been committed, by reason that the same or any of them are not forthcoming to any person claiming to be interested therein. R.S.O. 1990, c. B.16, s. 236 (2).
Voluntary dissolution
237. A corporation may be dissolved upon the authorization of,
(a) a special resolution passed at a meeting of the shareholders of the corporation duly called for the purpose or, in the case of a corporation that is not an offering corporation, by such other proportion of the votes cast as the articles provide, but such other proportion shall not be less than 50 per cent of the votes of all the shareholders entitled to vote at the meeting;
(b) the consent in writing of all the shareholders entitled to vote at such meeting; or
(c) all its incorporators or their personal representatives if the corporation has not commenced business and has not issued any shares. R.S.O. 1990, c. B.16, s. 237; 2006, c. 34, Sched. B, s. 36.
Articles of dissolution where corporation active
238. (1) For the purpose of bringing the dissolution authorized under clause 237 (a) or (b) into effect, articles of dissolution shall follow the prescribed form and shall set out,
(a) the name of the corporation;
(b) that its dissolution has been duly authorized under clause 237 (a) or (b);
(c) that it has no debts, obligations or liabilities or its debts, obligations or liabilities have been duly provided for in accordance with subsection (3) or its creditors or other persons having interests in its debts, obligations or liabilities consent to its dissolution;
(d) that after satisfying the interests of creditors in all its debts, obligations and liabilities, if any, it has no property to distribute among its shareholders or that it has distributed its remaining property rateably among its shareholders according to their rights and interests in the corporation or in accordance with subsection (4) where applicable; and
(e) that there are no proceedings pending in any court against it.
(f) Repealed: 1994, c. 27, s. 71 (25).
R.S.O. 1990, c. B.16, s. 238 (1); 1994, c. 27, s. 71 (25).

Articles of dissolution where corporation never active
(2) For the purpose of bringing a dissolution authorized under clause 237 (c) into effect, articles of dissolution shall follow the prescribed form and shall set out,
(a) the name of the corporation;
(b) the date set out in its certificate of incorporation;
(c) that the corporation has not commenced business;
(d) that none of its shares has been issued;
(e) that dissolution has been duly authorized under clause 237 (c);
(f) that it has no debts, obligations or liabilities;
(g) that after satisfying the interests of creditors in all its debts, obligations and liabilities, if any, it has no property to distribute or that it has distributed its remaining property to the persons entitled thereto; and
(h) that there are no proceedings pending in any court against it.
(i) Repealed: 1994, c. 27, s. 71 (26).
R.S.O. 1990, c. B.16, s. 238 (2); 1994, c. 27, s. 71 (26).

Where creditor unknown
(3) Where a corporation authorizes its dissolution and a creditor is unknown or a creditor’s whereabouts is unknown, the corporation may, by agreement with the Public Trustee, pay to the Public Trustee an amount equal to the amount of the debt due to the creditor to be held in trust for the creditor, and such payment shall be deemed to be due provision for the debt for the purposes of clause (1) (c). R.S.O. 1990, c. B.16, s. 238 (3).
Where shareholder unknown
(4) Where a corporation authorizes its dissolution and a shareholder is unknown or a shareholder’s whereabouts is unknown, it may, by agreement with the Public Trustee, deliver or convey the shareholder’s share of the property to the Public Trustee to be held in trust for the shareholder, and such delivery or conveyance shall be deemed to be a distribution to that shareholder of his, her or its rateable share for the purposes of the dissolution. R.S.O. 1990, c. B.16, s. 238 (4).
Power to convert
(5) If the share of the property so delivered or conveyed to the Public Trustee under subsection (4) is in a form other than cash, the Public Trustee may at any time, and within ten years after such delivery or conveyance shall, convert it into cash. R.S.O. 1990, c. B.16, s. 238 (5).
Payment to person entitled
(6) If the amount paid under subsection (3) or the share of the property delivered or conveyed under subsection (4) or its equivalent in cash, as the case may be, is claimed by the person beneficially entitled thereto within ten years after it was so delivered, conveyed or paid, it shall be delivered, conveyed or paid to the person, but, if not so claimed, it vests in the Public Trustee for the use of Ontario, and, if the person beneficially entitled thereto at any time thereafter establishes a right thereto to the satisfaction of the Lieutenant Governor in Council, an amount equal to the amount so vested in the Public Trustee shall be paid to the person. R.S.O. 1990, c. B.16, s. 238 (6).
Certificate of dissolution
239. (1) Upon receipt of the articles of dissolution, the Director shall endorse thereon in accordance with section 273 a certificate which shall constitute the certificate of dissolution. R.S.O. 1990, c. B.16, s. 239 (1).
Incorporators to sign articles of dissolution
(2) Despite clause 273 (1) (a), articles of dissolution for the purposes of subsection 238 (2) shall be signed by all its incorporators or their personal representatives. R.S.O. 1990, c. B.16, s. 239 (2).
Cancellation of certificate, etc., by Director
240. (1) Where sufficient cause is shown to the Director, despite the imposition of any other penalty in respect thereof and in addition to any rights the Director may have under this or any other Act, the Director may, after having given the corporation an opportunity to be heard, by order, upon such terms and conditions as the Director thinks fit, cancel a certificate of incorporation or any other certificate issued or endorsed under this Act or a predecessor of this Act, and,
(a) in the case of the cancellation of a certificate of incorporation, the corporation is dissolved on the date fixed in the order; and
(b) in the case of the cancellation of any other certificate, the matter that became effective upon the issuance of the certificate ceases to be in effect from the date fixed in the order. R.S.O. 1990, c. B.16, s. 240 (1).
Definition
(2) In this section,
“sufficient cause”, with respect to cancellation of a certificate of incorporation, includes,
(a) Repealed: 1994, c. 27, s. 71 (27).
(b) failure to comply with subsection 115 (2) or subsection 118 (3),
(c) Repealed: 1994, c. 27, s. 71 (27).
(d) a conviction of the corporation for an offence under the Criminal Code (Canada) or any other federal statute or an offence as defined in the Provincial Offences Act, in circumstances where cancellation of the certificate is in the public interest, or
(e) conduct described in subsection 248 (2). R.S.O. 1990, c. B.16, s. 240 (2); 1994, c. 27, s. 71 (27, 28).
Notice of dissolution
241. (1) Where the Director is notified by the Minister of Finance that a corporation is in default of complying with any of the following Acts, the Director may give notice by registered mail to the corporation or by publication once in The Ontario Gazette that an order dissolving the corporation will be issued unless the corporation remedies its default within 90 days after the notice is given:
1. Corporations Tax Act.
2. Employer Health Tax Act.
3. Fuel Tax Act.
4. Gasoline Tax Act.
5. Land Transfer Tax Act.
6. Retail Sales Tax Act.
6.1 Taxation Act, 2007.
7. Tobacco Tax Act. 2004, c. 31, Sched. 4, s. 1; 2008, c. 19, Sched. V, s. 1.
Idem
(2) Where the Director is notified by the Commission that a corporation has not complied with sections 77 and 78 of the Securities Act, the Director may give notice by registered mail to the corporation or by publication once in The Ontario Gazette that an order dissolving the corporation will be issued unless the corporation complies with sections 77 and 78 of the Securities Act within ninety days after the giving of the notice. R.S.O. 1990, c. B.16, s. 241 (2).
Same, non-filing
(3) Where a corporation fails to comply with a filing requirement under the Corporations Information Act or fails to pay a fee required under this Act, the Director may give notice in accordance with section 263 to the corporation or by publication once in The Ontario Gazette that an order dissolving the corporation will be issued unless the corporation, within 90 days after the notice is given, complies with the requirement or pays the fee. 1998, c. 18, Sched. E, s. 26 (1).
Order for dissolution
(4) Upon default in compliance with the notice given under subsection (1), (2) or (3), the Director may by order cancel the certificate of incorporation and, subject to subsection (5), the corporation is dissolved on the date fixed in the order. R.S.O. 1990, c. B.16, s. 241 (4).
Revival
(5) Where a corporation is dissolved under subsection (4) or any predecessor of it, the Director on the application of any interested person, may, in his or her discretion, on the terms and conditions that the Director sees fit to impose, revive the corporation; upon revival, the corporation, subject to the terms and conditions imposed by the Director and to the rights, if any, acquired by any person during the period of dissolution, shall be deemed for all purposes to have never been dissolved. 1999, c. 12, Sched. F, s. 9.
Time limit for application
(5.1) The application referred to in subsection (5) shall not be made more than 20 years after the date of dissolution. 2006, c. 34, Sched. B, s. 37.
Articles of revival
(6) The application referred to in subsection (5) shall be in the form of articles of revival which shall be in prescribed form. R.S.O. 1990, c. B.16, s. 241 (6).
Certificate of revival
(7) Upon receipt of articles of revival and any other prescribed documents, the Director, subject to subsection (5), shall endorse thereon in accordance with section 273 a certificate which shall constitute the certificate of revival. R.S.O. 1990, c. B.16, s. 241 (7).
Actions after dissolution
242. (1) Despite the dissolution of a corporation under this Act,
(a) a civil, criminal or administrative action or proceeding commenced by or against the corporation before its dissolution may be continued as if the corporation had not been dissolved;
(b) a civil, criminal or administrative action or proceeding may be brought against the corporation as if the corporation had not been dissolved;
(c) any property that would have been available to satisfy any judgment or order if the corporation had not been dissolved remains available for such purpose; and
(d) title to land belonging to the corporation immediately before the dissolution remains available to be sold in power of sale proceedings. R.S.O. 1990, c. B.16, s. 242 (1); 1998, c. 18, Sched. E, s. 27 (1, 2).
Interpretation
(1.1) In this section and section 244,
“proceeding” includes a power of sale proceeding relating to land commenced pursuant to a mortgage. 1998, c. 18, Sched. E, s. 27 (3).
Service after dissolution
(2) For the purposes of this section, the service of any process on a corporation after its dissolution shall be deemed to be sufficiently made if it is made upon any person last shown on the records of the Ministry as being a director or officer of the corporation before the dissolution. R.S.O. 1990, c. B.16, s. 242 (2).
Notice of action
(3) A person who commences an action, suit or other proceeding against a corporation after its dissolution, shall serve the writ or other document by which the action, suit or other proceeding was commenced, on the Public Guardian and Trustee in accordance with the rules that apply generally to service on a party to an action, suit or other proceeding. 1998, c. 18, Sched. E, s. 27 (4).
Same, power of sale proceeding
(4) A person who commences a power of sale proceeding relating to land against a corporation after its dissolution shall serve a notice of the proceeding on the Public Guardian and Trustee in accordance with the notice requirements in the Mortgages Act that apply with respect to a person with an interest in the land recorded in the records of the appropriate land registry office. 1998, c. 18, Sched. E, s. 27 (4).
Liability of shareholders to creditors
243. (1) Despite the dissolution of a corporation, each shareholder to whom any of its property has been distributed is liable to any person claiming under section 242 to the extent of the amount received by that shareholder upon the distribution, and an action to enforce such liability may be brought. R.S.O. 1990, c. B.16, s. 243 (1); 2002, c. 24, Sched. B, s. 27 (2).
Party action
(2) The court may order an action referred to in subsection (1) to be brought against the persons who were shareholders as a class, subject to such conditions as the court thinks fit and, if the plaintiff establishes his, her or its claim, the court may refer the proceedings to a referee or other officer of the court who may,
(a) add as a party to the proceedings before him or her each person who was a shareholder found by the plaintiff;
(b) determine, subject to subsection (1), the amount that each person who was a shareholder shall contribute towards satisfaction of the plaintiff’s claim; and
(c) direct payment of the amounts so determined. R.S.O. 1990, c. B.16, s. 243 (2).
Definition
(3) In this section,
“shareholder” includes the heirs and legal representatives of a shareholder. R.S.O. 1990, c. B.16, s. 243 (3).
Forfeiture of undisposed property
244. (1) Any property of a corporation that has not been disposed of at the date of its dissolution is immediately upon such dissolution forfeit to and vests in the Crown. R.S.O. 1990, c. B.16, s. 244 (1); 1994, c. 27, s. 71 (31).
Exception
(2) Despite subsection (1), if a judgment is given or an order or decision is made or land is sold in an action, suit or proceeding commenced in accordance with section 242 and the judgment, order, decision or sale affects property belonging to the corporation before the dissolution, unless the plaintiff, applicant or mortgagee has not complied with subsection 242 (3) or (4),
(a) the property shall be available to satisfy the judgment, order or other decision; and
(b) title to the land shall be transferred to a purchaser free of the Crown’s interest, in the case of a power of sale proceeding. 1998, c. 18, Sched. E, s. 28 (1).
Further exception
(3) A forfeiture of land under subsection (1) or a predecessor of subsection (1) is not effective against a purchaser for value of the land if the forfeiture occurred more than 20 years before the deed or transfer of the purchaser is registered in the proper land registry office. 1994, c. 27, s. 71 (32).
No notice
(4) Despite subsection (2), if a person commences a power of sale proceeding relating to land before the dissolution of a corporation but the sale of the land is not completed until after the dissolution, the person is not required to serve the notice mentioned in subsection 242 (4) and title to the land may be transferred to a purchaser free of the Crown’s interest. 1998, c. 18, Sched. E, s. 28 (2).
 

Burlington Business Lawyer Christopher R. Neufeld is a corporate attorney admitted to practice law in both Ontario (Canada) and New York (U.S.A.).  Christopher's legal practice focuses primarily on business law, in particular corporate commercial transactions.  The law firm of Neufeld Legal Professional Corporation is headquartered at 719 Catalina Crescent, Burlington, Ontario L7L 5B9, and as such is in immediate proximity to downtown Toronto, Mississauga, Hamilton, Oakville, Brampton, Milton, Guelph and Kitchener Waterloo. COPYRIGHT 2009.

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