Thus circumstances falling short of the dissolution of a corporation may result in the application of the subsection. Subsection 84(2) applies to the distribution by, or appropriation of funds or property of, a corporation resident in Canada to, or for the benefit of, its shareholders where any positive steps are taken towards the winding-up, discontinuance or reorganization of its business. In the Act the term "winding-up" is used to refer to both the winding-up of a corporation's business (see 2 below) and the winding-up of the corporation itself, that is, dissolution (see 3 to 5 below).Ģ. However, it is not necessary for the corporation to have been dissolved before the end of a year to have subsection 88(1) or (2) apply in the year.ġ. Subsection 84(2) applies on either the winding-up of a business or the winding-up of a corporation while subsections 88(1) or (2) only apply where the appropriate corporate procedures are followed to bring a corporation's existence to an end.
While a business that a corporation conducts may be wound up without affecting the corporation's existence, the winding-up of a corporation brings to an end both the existence of the corporation and that of its business. "Winding-up" is used in connection with the winding-up of a business and the winding-up of a corporation's existence. This Bulletin replaces and cancels Interpretation Bulletin IT-126R dated February 3, 1975. REFERENCE: Subsections 84(2) and 88(1) (also sections 66.6 and 66.7, subsection 88(2) and the definition of "disposition" in section 54) SUBJECT: INCOME TAX ACT Meaning of "Winding-up" What the "Archived Content" notice means for interpretation bulletins
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