Marginal note:Powers of liquidator

• 232. (1) A liquidator may

  • (a) retain legal counsel, accountants, engineers, appraisers and other professional advisers;

  • (b) bring, defend or take part in any civil, criminal or administrative action or proceeding on behalf of the corporation;

  • (c) carry on the activities of the corporation as required for an orderly liquidation;

  • (d) sell by public auction or private sale any property of the corporation;

  • (e) do all acts and execute or, in Quebec, sign any documents on behalf of the corporation;

  • (f) borrow money on the security of the property of the corporation;

  • (g) settle or compromise or, in Quebec, transact on any claims by or against the corporation; and

  • (h) do all other things necessary for the liquidation of the corporation and distribution of its property.

• Marginal note:Due diligence

  (2) A liquidator is not liable if the liquidator exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances, including reliance in good faith on

  • (a) financial statements of the corporation represented to the liquidator by an officer of the corporation or in a written report of the public accountant of the corporation fairly to reflect the financial condition of the corporation; or

  • (b) a report of a person whose profession lends credibility to a statement made by that person.

• Marginal note:Liability for environmental matters

  (3) Despite anything in federal or provincial law, a liquidator is not liable, in that capacity, for any environmental condition or environmental damage, unless the condition arose or the damage occurred after the liquidator’s appointment as a result of the liquidator’s gross negligence or wilful misconduct or, in Quebec, the liquidator’s gross or intentional fault.

• Marginal note:Application for examination

  (4) On the application of a liquidator, the court may — if it is satisfied that there are reasonable grounds to believe that any person has in their possession or under their control, or has concealed, withheld or misappropriated, any property of the corporation — make an order requiring that person to appear before the court at the time and place designated in the order and to be examined.

• Marginal note:Power of court

  (5) If the court is satisfied, on the examination, that the person has concealed, withheld or misappropriated property of the corporation, the court may order that person to restore it or pay compensation to the liquidator.

Marginal note:Costs of liquidation

• 233. (1) A liquidator shall pay the costs of liquidation out of the property of the corporation and shall pay, or make adequate provision for, all claims against the corporation.

• Marginal note:Final accounts

  (2) Within the prescribed period after appointment, and after paying, or making adequate provision for, all claims against the corporation, the liquidator shall apply to the court

  • (a) for approval of the final accounts and for an order permitting the liquidator to distribute in money or in kind the remaining property of the corporation in accordance with sections 234 to 236; or

  • (b) for an extension of time, setting out the reasons for the extension.

• Marginal note:Member application

  (3) On the application of a member of the corporation, the court may, if a liquidator fails to make the application required by subsection (2), order the liquidator to show cause why a final accounting and distribution should not be made.

• Marginal note:Publication

  (4) A liquidator shall give notice of their intention to make an application under subsection (2) to the Director, to each inspector appointed under paragraph 227(c), to each member and to any person who provided a security or fidelity bond or fidelity insurance for the liquidation, and shall publish the notice in a newspaper published or distributed in the place where the corporation has its registered office, or as otherwise directed by the court.

• Marginal note:Final order

  (5) If the court approves the final accounts rendered by a liquidator, the court shall make an order

  • (a) directing the Director to issue a certificate of dissolution;

  • (b) giving directions regarding the custody of documents and records of the corporation or their disposition, including by destruction; and

  • (c) discharging the liquidator.

• Marginal note:Delivery of order

  (6) The liquidator discharged under subsection (5) shall immediately send a certified copy of the order referred to in that subsection to the Director.

• Marginal note:Certificate of dissolution

  (7) On receipt of a certified copy of the order referred to in subsection (5), the Director shall issue a certificate of dissolution.

• Marginal note:Effect of certificate

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

Marginal note:Transfer on condition of return

234. If a person has transferred property to a corporation subject to the condition that it be returned on the dissolution of the corporation, the liquidator shall transfer that property to that person.

Marginal note:Application

• 235. (1) This section applies to

  • (a) a corporation that is a registered charity within the meaning of subsection 248(1) of the Income Tax Act;

  • (b) a soliciting corporation; and

  • (c) a corporation that has, in the prescribed period, received income in excess of the prescribed amount in the form of

    • (i) donations or gifts or, in Quebec, gifts or legacies of money or other property requested from any person who is not

      • (A) a member, director, officer or employee of the corporation at the time of the request,

      • (B) a spouse of a person referred to in clause (A) or an individual who is cohabiting with that person in a conjugal relationship, having so cohabited for a period of at least one year, or

      • (C) a child, parent, brother, sister, grandparent, uncle, aunt, nephew or niece of a person referred to in clause (A) or of a spouse or individual referred to in clause (B),

    • (ii) grants or similar financial assistance received from the federal government or a provincial or municipal government, or an agency of such a government, or

    • (iii) donations or gifts or, in Quebec, gifts or legacies of money or other property from a corporation or other entity that has, in the prescribed period, received income in excess of the prescribed amount in the form of donations, gifts or legacies referred to in subparagraph (i) or grants or similar financial assistance referred to in subparagraph (ii).

• Marginal note:Articles to provide for distribution of property

  (2) The articles of a corporation shall provide that any property remaining on liquidation after the discharge of any liabilities of the corporation, other than property referred to in section 234, shall be distributed to one or more qualified donees, within the meaning of subsection 248(1) of the Income Tax Act.

• Marginal note:Distribution in accordance with order

  (3) If the articles of a corporation do not provide for distribution to one or more qualified donees, the liquidator shall apply for an order under section 227 for the distribution of the remaining property of the corporation, other than the property referred to in section 234, to one or more qualified donees.

• Marginal note:Notice of application

  (4) The liquidator shall give notice to the Director of the application, and the Director may appear and be heard in person or by counsel.

Marginal note:Distribution in accordance with articles

• 236. (1) If the articles of a corporation, other than a corporation referred to in subsection 235(1), provide for the distribution of property remaining on liquidation after the discharge of any liabilities of the corporation, the liquidator shall distribute the remaining property, other than the property referred to in section 234, in accordance with the articles.

• Marginal note:Distribution to members

  (2) If the articles do not provide for the distribution of the remaining property, the liquidator shall divide the remaining property, other than the property referred to in section 234, into as many equal shares as there are memberships in the corporation and distribute one share to the holder of each membership.

Marginal note:Right to distribution in money

• 237. (1) If in the course of liquidation of a corporation the members resolve or the liquidator proposes to do any of the following, a member may apply to the court for an order requiring the distribution of the property of the corporation to be in money:

  • (a) exchange all or substantially all of the property of the corporation for securities, debt obligations or memberships of another body corporate that are to be distributed to the members; or

  • (b) distribute all or part of the property of the corporation to the members in kind.

• Marginal note:Powers of court

  (2) On an application under subsection (1), the court may order all of the property of the corporation to be converted into and distributed in money.

Marginal note:Custody of records

238. A person who has been granted custody of the documents and records of a dissolved corporation remains liable to produce those documents and records until the expiry of the prescribed period after the corporation’s dissolution or of any shorter period fixed by an order made under subsection 233(5).

Definition of “member”

• 239. (1) In this section, “member” includes the heirs and personal representatives of a member.

• Marginal note:Continuation of actions

  (2) Despite the dissolution of a corporation under this Act,

  • (a) any civil, criminal or administrative action or proceeding commenced by or against the dissolved corporation before its dissolution may be continued as if the corporation had not been dissolved;

  • (b) any civil, criminal or administrative action or proceeding may be brought against the dissolved corporation within two years after its dissolution as if the corporation had not been dissolved; and

  • (c) any property that would have been available to satisfy any judgment or order if the corporation had not been dissolved remains available for that purpose.

• Marginal note:Service on corporation

  (3) Service of a document on a corporation after its dissolution may be effected by serving the document on a person whose name appears on the last notice that was sent by the corporation in accordance with section 128 or 134 and received by the Director.

• Marginal note:Service on company

  (4) Service of a document on a company to which the Canada Corporations Act, chapter C-32 of the Revised Statutes of Canada, 1970, applied and that has been dissolved under subsection 297(5) may be effected by serving the document on a person shown as a director in the last annual summary filed by the company under that Act.

• Marginal note:Reimbursement

  (5) Despite the dissolution of a corporation under this Act, a member to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount received by that member on that distribution, and an action to enforce that liability may be brought within two years after the date of the dissolution of the corporation.

• Marginal note:Representative action

  (6) A court may order an action referred to in subsection (5) to be brought against the persons who were members as a class or group, subject to any conditions that the court thinks fit, and, if the plaintiff establishes a 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 each person who was a member found by the plaintiff;

  • (b) determine, subject to subsection (5), the amount that each person who was a member shall contribute towards satisfaction of the plaintiff’s claim; and

  • (c) direct payment of the amounts so determined.