Corporate Bankruptcy

If you are operating a limited company, it is possible to bankrupt that company. Under Canadian law, Corporations are considered separate legal entities and therefore the company itself can file for bankruptcy if necessary.

Bankruptcy is the final solution if the company concept is not viable. If continuation of the business is viable but it is being strangled by high debt loads, non sustainable leases and so on, the Company can file a Proposal (See Division 1 Proposal), which gives the Company time to restructure and continue to operate. However, if a Proposal is not an option, Bankruptcy may be the best solution.

Generally, corporate bankruptcy is used when there are unsecured assets belonging to the company that need to be divided up amongst the creditors. In other situations, a Winding-Up of the Company is needed under the direction of a Trustee to give comfort that all parties are being treated equally. Colleen Craig, as a licensed Trustee in Bankruptcy, can walk you through your options if you are considering a Corporate Insolvency.