New Rules for Ontario Dissolved Corporations
As of December 10, 2016 new rules are applicable for corporations that have been dissolved in Ontario for failure to file tax returns with new deadlines within which owners may revive a dissolved corporation and recover the corporate assets. Previously real property that was owned by a corporation that was involuntarily dissolved, usually for failure to file tax returns, would be forfeited to the provincial Crown. Owners had a period of 20 years within which to achieve compliance with the corporation’s obligations and revive the corporation to recover the assets.
Under the new rules, a corporation may still be revived by its owners within a 20 year period. However, if the corporation is not revived within a three year period the corporation will not recover its assets and they will have properly vested in the Crown. Once the three year deadline is reached the Crown will be within its rights to use the property as it sees fit, dispose of it and even delete any previous encumbrances such as mortgages. There are limited exceptions to this rule and the discretion to revisit a forfeiture is solely in the hands of the responsible Minister. Thus, corporate owners will only be able to seek a limited judicial review of a forfeiture. Any owners of dissolved corporations should look to revive the corporation immediately.
Disclaimer:
"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."
