The Bankruptcy and Insolvency Act allows us to provide several avenues for businesses in financial difficulty, whether they are registered or incorporated (corporation).
It is important for the directors of a company to act quickly when financial difficulties begin to arise, since the deterioration of the situation can have serious repercussions for the directors personally. Indeed, several laws create personal responsibilities for directors, in particular with regard to taxes (GST and QST) and deductions from salaries. If such debts exist, directors can expect governments to sue them personally, despite the business being incorporated.
The Bankruptcy and Insolvency Act allows financially troubled businesses to present a proposal to creditors, including debts owed to governments. Such a proposal, once accepted, allows the company to continue its activities, and also allows the directors to be released from their personal responsibilities concerning the debts of a fiscal nature, under certain conditions. In summary, the Law allows a company to place itself under protection which can last from thirty (30) days up to six (6) months, during which time the company must develop a plan to restructure its business. , as well as an offer to be presented to all of its creditors. As the mechanisms involved are quite complex, it is preferable that you contact us directly, to obtain additional information. Remember, however, that it is always better to act sooner than later, as your room for maneuver may be greatly reduced if you allow the situation to deteriorate for too long a period of time.