| 5-913395 | |
| 24(1) | D.J. Powrie |
| (613) 957-2109 |
Attention: 19(1)
February 6, 1992
Dear Sirs:
Dissolution under subsection 240(3) of the Business Corporations Act, 1982 (Ontario) (the "OBCA")
This is in reply to your letter of December 4, 1991 in which you requested our views as to whether a corporation which has been dissolved by order of the Director under the OBCA pursuant to subsection 240(3) of the OBCA will have been "wound up" within the meaning of that term in subsection 88(1.1) of the Income Tax Act.
Your request relates to a specific fact situation and to events which have already occurred and you should accordingly contact the appropriate District Taxation Office for their advice as to the tax consequences of these events.
We can offer the general comment, however, that in our view a corporation which is dissolved under subsection 240(3) will not necessarily have been "wound up." In our general view, as expressed in paragraphs three and four of IT-126R dated February 3, 1975, a corporation will have been wound up if its affairs have been wound up and it has been dissolved. For a corporation to have been wound up, steps must have been taken to ensure that the corporation's liabilities and obligations have been satisfied and that its assets have been distributed; the fact that a corporation has been dissolved does not in itself establish that it has been wound up.
You may find some useful guidance in IT-444 dated March 17, 1980 which expresses the Department's views of the tax consequences of an involuntary dissolution of a corporation.
The foregoing comments are given in accordance with the practice referred to in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990 and are not binding on Revenue Canada, Taxation.
Yours truly,
for DirectorReorganizations and Foreign DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch