The Bankruptcy and Insolvency Act enables us to offer a variety of methods to companies in financial difficulty, whether they are registered or incorporated .
It is important that the directors of a company act quickly when finacial difficulties arise because as the situation deteriorates, there could be serious repercussions for these same directors. In fact, many laws in place hold directors personally responsible, notably in the area of the GST and PST taxes and deductions in salaries. If there are such debts, the directors can expect the government to launch personal lawsuits against them. And this even though the company is incorporated.
The Bankruptcy and Insolvency Act allows companies in financial difficulty to make a proposal to creditors, including debts owed to the government. This proposal, once accepted, allows the company to stay in business and frees the directors of their personal responsibility with respect to the fiscal debt (under certain conditions).
In closing, the Law allows a company to put itself under bankruptcy protection for a period that may range from thirty (30) days to six (6) months during which time the company must come up with a plan to restructure the company and an proposal to be presented at the meeting with the creditors.
Since the procedures are rather complex, it would be preferable if you contact us directly to receive additional information. Remember, it’s better to act sooner than later because your margin of manoeuvrability is greatly reduced if you wait too long.