Canada Not-for-profit Corporations Act (S.C. 2009, c. 23)

Marginal note:Grounds for dissolution

• 223. (1) The Director or any interested person may apply to a court for an order dissolving a corporation if the corporation has

  • (a) failed for the prescribed period to comply with the requirements of this Act with respect to the holding of annual meetings of members;

  • (b) contravened subsection 17(2) or section 22, 23, 174 or 175; or

  • (c) procured any certificate under this Act by misrepresentation.

• Marginal note:Notice to Director

  (2) An interested person who makes an application under this section shall give the Director notice of the application, and the Director is entitled to appear and be heard in person or by counsel.

• Marginal note:Dissolution order

  (3) On an application under this section or section 222, the court may order that the corporation be dissolved or that the corporation be liquidated and dissolved under the supervision of the court and may make any other order that it thinks fit.

• Marginal note:Certificate

  (4) On receipt of an order under this section or section 222 or 224, the Director shall

  • (a) if the order is to dissolve the corporation, issue a certificate of dissolution; or

  • (b) if the order is to liquidate and dissolve the corporation under the supervision of the court, issue a certificate of intent to dissolve and publish notice of the order in a publication generally available to the public.

• Marginal note:Effect of certificate

  (5) The corporation ceases to exist on the date shown in the certificate of dissolution.

Marginal note:Further grounds

• 224. (1) On the application of a member, a court may order the liquidation and dissolution of a corporation or any of its affiliated corporations

  • (a) if the court is satisfied that in respect of the corporation or any of its affiliates, any of the following is oppressive or unfairly prejudicial to, or unfairly disregards the interests of, any shareholder, creditor, director, officer or member, or causes such a result:

    • (i) any act or omission of the corporation or any of its affiliates,

    • (ii) the conduct of the activities or affairs of the corporation or any of its affiliates, or

    • (iii) the exercise of the powers of the directors of the corporation or any of its affiliates; or

  • (b) if the court is satisfied that

    • (i) a unanimous member agreement entitles a complaining member to demand dissolution of the corporation after the occurrence of a specified event and that event has occurred, or

    • (ii) it is just and equitable that the corporation should be liquidated and dissolved.

• Marginal note:Faith-based defence

  (2) The court may not make an order under paragraph (1)(a) if the court is satisfied that

  • (a) the corporation is a religious corporation;

  • (b) the act or omission, the conduct or the exercise of powers is based on a tenet of faith held by the members of the corporation; and

  • (c) it was reasonable to base the act or omission, the conduct or the exercise of powers on the tenet of faith, having regard to the activities of the corporation.

• Marginal note:Alternative order

  (3) On an application under this section, the court may make any order under this section or section 253 that it thinks fit.

• Marginal note:Application of s. 254

  (4) Section 254 applies to an application under this section.

Marginal note:Application for supervision

• 225. (1) An application to a court to supervise a voluntary liquidation and dissolution under subsection 221(8) shall state the reasons, verified by an affidavit of the applicant, why the court should supervise the liquidation and dissolution.

• Marginal note:Court supervision

  (2) If a court makes an order applied for under subsection 221(8), the liquidation and dissolution of the corporation shall continue under the supervision of the court in accordance with this Act.

Marginal note:Application to court

• 226. (1) An application to a court under subsection 224(1) shall state the reasons, verified by an affidavit of the applicant, why the corporation should be liquidated and dissolved.

• Marginal note:Show cause order

  (2) On the application, the court may make an order requiring the corporation and any interested person to show cause, at a time and place specified in the order, within the prescribed period after the date of the order, why the corporation should not be liquidated and dissolved.

• Marginal note:Powers of court

  (3) On the application, the court may order the directors and officers of the corporation to furnish the court with all material information known to or reasonably ascertainable by them, including

  • (a) financial statements of the corporation;

  • (b) the name and address of each member of the corporation; and

  • (c) the name and address of each known creditor or claimant, including any creditor or claimant with unliquidated, future or contingent claims, and any person with whom the corporation has a contract.

• Marginal note:Publication

  (4) A copy of an order made under subsection (2) shall be

  • (a) published as directed in the order, at a prescribed minimum frequency, before the time appointed for the hearing, in a newspaper published or distributed in the place where the corporation has its registered office; and

  • (b) served on the Director and each person named in the order.

• Marginal note:Person responsible

  (5) Publication and service of an order under this section shall be effected by the corporation or by any other person, and in any manner, that the court orders.

Marginal note:Powers of court

227. In connection with the dissolution or the liquidation and dissolution of a corporation, the court may, if it is satisfied that the corporation is able to pay or adequately provide for the discharge of all its liabilities, make

• (a) an order to liquidate;

• (b) an order appointing or replacing a liquidator, with or without security, and fixing the remuneration of the liquidator or their replacement;

• (c) an order appointing or replacing inspectors or referees and specifying the powers and fixing the remuneration of the inspectors or referees or their replacements;

• (d) an order determining the notice to be given to any interested person, or dispensing with notice to any person;

• (e) an order determining the validity of any claims made against the corporation;

• (f) an order, at any stage of the proceedings, restraining the directors and officers

  • (i) from exercising any of their powers, or

  • (ii) from collecting or receiving any debt or other property of the corporation and from paying out or transferring any property of the corporation, except as permitted by the court;

• (g) an order determining and enforcing

  • (i) the duty of any present or former director, officer or member to the corporation, or

  • (ii) the liability of such a person for an obligation of the corporation;

• (h) an order approving the payment, satisfaction or compromise or, in Quebec, transaction of claims against the corporation and the retention of assets for that purpose, and determining the adequacy of provisions for the payment or discharge of liabilities of the corporation, whether liquidated, unliquidated, future or contingent;

• (i) an order determining the use of documents and records of the corporation or directing their disposition, including by destruction;

• (j) on the application of a creditor, the inspectors or the liquidator, an order giving directions on any matter arising in the liquidation;

• (k) an order specifying to whom the assets of the corporation will be distributed;

• (l) after notice has been given to all interested parties, an order relieving a liquidator from any omission or default on any terms that the court thinks fit and confirming any act of the liquidator;

• (m) subject to sections 233 to 236, an order approving any proposed interim or final distribution of money or other property;

• (n) an order disposing of any property belonging to creditors or members who cannot be found;

• (o) on the application of any director, officer, member or creditor or the liquidator,

  • (i) an order staying the liquidation on any terms and conditions that the court thinks fit,

  • (ii) an order continuing or discontinuing the liquidation proceedings, or

  • (iii) an order to the liquidator to restore to the corporation all its remaining property;

• (p) after the liquidator has rendered a final account to the court, an order dissolving the corporation; and

• (q) any other order that it thinks fit.

Marginal note:Effect of order

228. The liquidation of a corporation commences when a court makes a liquidation order.

Marginal note:Cessation of activities and powers

• 229. (1) If a court makes an order for the liquidation of a corporation,

  • (a) the corporation continues in existence but shall cease to carry on activities, except activities that are, in the opinion of the liquidator, required for an orderly liquidation; and

  • (b) the powers of the directors and members cease and vest in the liquidator, except as specifically authorized by the court.

• Marginal note:Delegation by liquidator

  (2) The liquidator may delegate any powers vested in the liquidator by paragraph (1)(b) to the directors or members.

Marginal note:Appointment of liquidator

• 230. (1) When making an order for the liquidation of a corporation or at any time after making the order, the court may appoint any person, including a director, an officer or a member of the corporation or any other body corporate, as liquidator of the corporation.

• Marginal note:Vacancy

  (2) If an order for the liquidation of a corporation has been made and the office of liquidator is or becomes vacant, the property of the corporation is under the control of the court until the office of liquidator is filled.

Marginal note:Duties of liquidator

231. A liquidator shall

• (a) immediately after appointment give notice of the appointment to the Director and to each claimant and creditor known to the liquidator;

• (b) in each province where the corporation carries on activities, provide, without delay, notice in accordance with the regulations of the appointment

  • (i) requiring any person indebted to the corporation to render an account and pay to the liquidator at the time and place specified any amount owing,

  • (ii) requiring any person possessing property of the corporation to deliver it to the liquidator at the time and place specified, and

  • (iii) requiring any person having a claim against the corporation, whether liquidated, unliquidated, future or contingent, to present particulars of the claim in writing to the liquidator within the prescribed period;

• (c) take into custody and control the property of the corporation;

• (d) open and maintain a trust account for the money of the corporation;

• (e) keep accounts of the money of the corporation received and paid out by the liquidator;

• (f) maintain separate lists of the members, creditors and other persons having claims against the corporation;

• (g) if at any time the liquidator determines that the corporation is unable to pay or adequately provide for the discharge of its liabilities, apply to the court for directions;

• (h) deliver to the court and to the Director, at least once in the prescribed period after appointment or more often as the court may require, financial statements of the corporation in the form required by section 172 or in any other form that the liquidator may think proper or as the court may require; and

• (i) after the final accounts are approved by the court, distribute any remaining property of the corporation in accordance with sections 234 to 236.