What is the difference between winding up and dissolving an Ontario corporation?

The terms winding up and dissolution are sometimes used interchangeably, but they describe related but distinct concepts. Dissolution is the legal event that ends the corporation's existence — it is the moment the corporation ceases to be a legal person. Winding up is the process that precedes dissolution: gathering the corporation's assets, paying off its debts and liabilities, and distributing any remaining assets to shareholders.

For a simple voluntary dissolution of a solvent Ontario corporation with no creditors, the process can be relatively straightforward — shareholder approval, government tax clearance, and filing articles of dissolution. For a corporation that is insolvent (more debts than assets), a formal winding up under the Ontario Winding-up and Restructuring Act or federal proceedings may be necessary, which involves court oversight to protect creditors.

After dissolution, the corporation no longer legally exists, though it can be revived as described elsewhere. Former officers and directors may retain certain residual liabilities (such as for unremitted taxes or unpaid wages). Ensuring all obligations are addressed before dissolving — including payroll remittances, HST filings, and employee obligations — is essential to minimize personal risk. Legal and accounting advice before starting the dissolution process is strongly recommended.