Words and Phrases - "dissolution"

Commercial understanding of “liquidation” and “dissolution” (p. 8)

I]t is reasonably clear that the terms "liquidation" and "dissolution" each have generally accepted and well-understood meaning for Canadian legal practitioners. "Liquidation" generally refers to the factual process of satisfying a corporation's creditors and distributing its remaining assets to its shareholders, and "dissolution" generally refers to the acceptance by the relevant corporate registrar of the corporation's articles of dissolution, which terminates the corporation's legal existence. It is broadly understood that a corporation is "liquidated" before it is "dissolved".

Use of “winding-up” in domestic provisions (p. 9)

What appears to be important in determining whether a corporation has been "liquidated" or "wound-up" is the broad substance of what occurred: Was there a realization of the corporation's assets (if any), a discharge of its liabilities (if any), and a distribution of its surplus (if any) to its shareholders? Canadian courts have qualified transactions and events as "liquidations" or "winding-ups" where, in substance, the corporation was left with no property and no liabilities and the surplus (if any) had been distributed to its shareholders. [citing Dauphin Plains and Smythe].

CRA interpretation of “liquidation and dissolution” (p. 9)

Based on [2003-0034311E5], whether a "liquidation and dissolution" of an FA has occurred is arguably not determined by reference to the specific requirements of Canadian corporate law statutes, but rather by reference to the broader meanings of "liquidation" and "dissolution" in Canadian corporate law parlance. The CRA seems to consider that it is the substance of what occurred (as opposed to the form) that is important.