Dissolving A New Brunswick Corporation

Dissolving a corporation in New Brunswick, Canada, is a complex process that can take up to two months to complete. It is recommended to begin the dissolution process as soon as the corporation is no longer needed, as keeping a dormant corporation may lead to complications with the CRA. Before initiating the dissolution, it is essential to settle all outstanding payments, including bills, salaries, and tax returns. Additionally, a signed shareholder resolution approving the dissolution must be obtained. The process involves requesting consent from the New Brunswick government, followed by the filing and obtaining of Articles of Dissolution. The entire process typically spans 14 business days.

How to dissolve a corporation in New Brunswick

Obtaining consent from the New Brunswick government

Step 1: Prepare and Submit the Request

Firstly, you need to prepare a formal request seeking consent from the New Brunswick government to dissolve your corporation. This request should include all the relevant information about your company, such as its name, registration number, and reason for dissolution. Make sure to review the requirements and guidelines provided by the provincial authorities to ensure your request is complete and accurate.

Step 2: Submit the Request to the Appropriate Authority

Once your request is ready, you need to submit it to the appropriate government department or agency in New Brunswick. This could be the provincial Ministry of Finance, or a similar body. Submit your request along with any required supporting documents and fees.

Step 3: Wait for a Response

After submitting your request, you will need to wait for a response from the New Brunswick government. The time it takes to receive a response may vary, so be sure to follow up if you haven't heard back within a reasonable amount of time. They may also request additional information or documentation, so be prepared to provide any necessary details.

Step 4: Receive Consent or Address Concerns

If your request is approved, you will receive official consent from the New Brunswick government to proceed with the dissolution. This consent will typically be in the form of a letter or certificate. However, if there are concerns or your request is denied, you may need to address those issues before proceeding. This could involve making changes to your request, providing additional information, or seeking legal advice.

Step 5: Proceed with the Dissolution

Once you have received consent from the New Brunswick government, you can continue with the dissolution process. This typically involves filing articles of dissolution, obtaining approved articles, and completing any other necessary steps as outlined by the provincial authorities. Remember to carefully follow the guidelines provided by the government to ensure a smooth and compliant dissolution process.

Filing of Articles of Dissolution

To dissolve a corporation in New Brunswick, you must first obtain consent from the provincial government. This involves sending a request to the New Brunswick government and receiving their approval to dissolve the corporation.

Once consent has been obtained, you can proceed with the filing of the Articles of Dissolution. The Articles of Dissolution is a legal document that officially dissolves the corporation and must be filed with the appropriate government office, which, in this case, is the New Brunswick Corporate Registries Office.

The specific process for filing the Articles of Dissolution may vary, but it typically involves completing and submitting the necessary forms, along with any required fees, to the designated office. It is important to ensure that all outstanding liabilities, salaries, and tax returns are addressed before initiating the dissolution process.

The time it takes to obtain the approved Articles of Dissolution can vary, but it typically ranges from 1 to 14 business days in New Brunswick. It's important to note that the process of dissolving a corporation can be complex, and seeking professional assistance can help make it smoother and more efficient.

Paying outstanding salaries and bills

Before Dissolution:

• Pay Outstanding Bills and Liabilities: It is crucial to settle all your outstanding payments to suppliers and any other liabilities your company may have. This ensures that you leave your business relationships on good terms and avoid potential legal issues.
• Pay Outstanding Salaries to Employees: Make sure to pay your employees their salaries, wages, and any other compensation owed to them. This includes final payments, bonuses, and any other benefits that they are entitled to.
• File Outstanding Tax Returns: You are required to file all necessary tax returns, including corporate income tax and GST/HST returns, with the Canada Revenue Agency (CRA). This ensures that your corporation is compliant with tax obligations before dissolution.

After Dissolution:

File Final Corporate Income Tax Return: After the dissolution, you must file the final corporate income tax return with the CRA. This return covers the period from the fiscal year-end until the date of dissolution. This step ensures that your corporation's tax obligations are concluded.

By following these steps, you can effectively address outstanding salaries and bills during the dissolution process. Remember to consult with legal and financial professionals to ensure compliance with all relevant laws and regulations.

Filing final corporate income tax returns

To dissolve a corporation in New Brunswick, you must file the final corporate income tax return with the Canada Revenue Agency. This is a separate process from filing your annual return, which is a mandatory requirement for corporations to maintain their "active" legal status.

The final corporate income tax return should be filed for the period from the fiscal year-end until the date of dissolution. This is one of the final steps in the dissolution process, which also includes paying all outstanding liabilities and salaries, filing outstanding tax returns, and obtaining a signed shareholder resolution approving the dissolution.

In New Brunswick, corporations are taxed at either a lower rate of 2.5% or a higher rate of 14%, depending on their income eligibility. To calculate the tax, you can use Schedule 366 (New Brunswick Corporation Tax Calculation) and enter the amount on line 225 of Schedule 5 (Tax Calculation Supplementary – Corporations).

Additionally, there are various tax credits available, such as the research and development tax credit and the small business investor tax credit. These credits can be claimed on the relevant schedules, such as Schedule 5 and Schedule 366.

It is important to note that failure to file annual returns may lead to the involuntary dissolution of your corporation. Therefore, it is crucial to stay compliant by submitting the necessary tax returns and maintaining up-to-date corporate information with the New Brunswick Corporate Registry Office.

Obtaining a Certificate of Dissolution

Firstly, it is recommended to dissolve any outstanding bills and liabilities, including paying off suppliers and employees. This ensures that there are no lingering financial obligations tied to the corporation. Additionally, all outstanding tax returns, including corporate income tax and GST/HST returns, should be filed with the Canada Revenue Agency (CRA).

The next step is to send a signed shareholder resolution approving the dissolution. This step is crucial as it indicates that the decision to dissolve the corporation has been agreed upon by the relevant stakeholders.

After the dissolution has been initiated, there are still a few important steps to complete. The final corporate income tax return should be filed with the CRA for the period from the fiscal year-end until the date of dissolution. This ensures that all financial obligations are met and the corporation is compliant up to its date of dissolution.

To officially commence the dissolution process, a request must be sent to the New Brunswick government seeking their consent to dissolve the corporation. Once consent is obtained, the Articles of Dissolution can be filed, and the approved Articles of Dissolution will be obtained. This typically takes around 14 business days.

It is important to note that the CRA considers a corporation active until it is officially dissolved. Therefore, it is advisable to initiate the dissolution process as soon as the corporation is no longer needed to avoid potential complications.

Frequently asked questions