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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Ltd Company Shareholder?

I own a Ltd Company. I own 45%, my father 30% and mother 25%. They have no involvment in the company. Only on paper. If the business declared Bankruptcy how could they be affected? I have my personal guarantee on two demand loans at the bank. My parents names are not on these or any other papers except when the shares were divided. I guess I would still be responsiable for 100% of the demand loans? Can my parents be affected in any way due to there shares?
Thanks for your time.

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One Response to “Ltd Company Shareholder?”

A licensed trustee said...

If your parents are not directors of the business, but simply shareholders then they only have to worry about losing their investment in the business. They cannot be held responsible for the debts of the business unless they personally guaranteed the debt (like you did).

If they are directors then there are a number of government obligations, as well as payroll, that they may be held responsible for.

Corporate bankruptcies can be tricky – you should really contact a trustee in your area to discuss your situation rather than relying on a free website. Use the links at the side of the page to find someone in yoru area to help.