Legal Responsibilities in Dissolution
The CPA mandates that a condominium corporation may be terminated if the corporation registers a notice of termination. This requires a resolution passed by the board and approval from the unit owners, meeting the specified voting thresholds. Once the notice is registered, the corporation ceases to exist, and the property reverts to ownership by the former unit owners as tenants in common.
Financial, Operational, and Administrative Processes
Finalizing Financial Affairs:
Asset Liquidation: Sell all corporation property and settle outstanding debts.
Final Tax Filings: Complete and submit any required tax documents to the appropriate authorities.
Distribution of Remaining Assets: Allocate any residual funds or assets among unit owners according to their unit factors.
Required Filings and Notifications:
Notice of Intent to Dissolve: Prepare and file the necessary documentation indicating the corporation's intent to dissolve.
Articles of Dissolution: Submit formal articles to the Corporate Registry to legally dissolve the corporation.
Stakeholder Communication: Inform all relevant parties, including creditors, service providers, and municipal authorities, about the dissolution.
Operational and Administrative Tasks:
Terminate Contracts: End agreements with service providers, suppliers, and employees in accordance with contract terms and legal requirements.
Close Accounts: Shut down bank accounts, utilities, and other operational services associated with the corporation.
Record Keeping: Ensure all corporate records are archived as per legal requirements for future reference.
Risks and Potential Challenges
Legal Liabilities: Unresolved legal issues or pending litigation can complicate the dissolution process.
Financial Disputes: Disagreements among unit owners regarding asset distribution or debt settlements may arise.
Regulatory Compliance: Failure to adhere to all procedural requirements can result in delays or legal repercussions.
Compliance Checklist Development
Task: Develop a comprehensive compliance checklist detailing all necessary steps to effectively dissolve a condominium corporation.
Steps to Include:
Owners Resolution: Document the decision to dissolve and obtain the required approval from unit owners.
Financial Settlement: List all assets, liabilities, and outline the process for liquidation and debt payment.
Regulatory Filings: Specify the forms and documents required by the Corporate Registry and other authorities.
Notifications: Identify all stakeholders who need to be informed about the dissolution.
Record Archiving: Detail the procedures for preserving essential records post-dissolution.
