August 7th, 2008 by Questions
If I file personal bankruptcy and I own 1/3 of a business which is a corporation, does the Bankruptcy affect the corporation or the other owners in any way?
Posted from: Ontario
August 08, 2008 at 6:09 am, A licensed trustee said:
The other owners may be affected in the following ways:
1) the 1/3 of the business that you own becomes an asset that your trustee will have to deal with (ie your trustee has to turn your shares into cash)
2) you may not serve as a director or officer of the corporation while you are an undischarged bankrupt – if you are a director you must resign before you file
3) debts of the corporation that you have personally guaranteed will be included on your list of creditors and notified of your bankruptcy (and that may affect the corporations ability to access credit)
I strongly suggest you speak to a trustee, or an insolvency lawyer about your corporation before you proceed…
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