CAN I KEEP MY CORPORATION RUNNING WHILE I DECLARE PERSONAL BANKRUPTCY
I OWN AN INCORPORATED TRUCKING BUSINESS. IT IS ONLY A ONE TRUCK OPERATION AND I AM THE SOLE EMPLOYEE OF THIS BUSINESS. CAN I DECLARE PERSONAL BANKRUPTCY BUT RETAIN THE OPERATIONS OF THIS CORPORATION SINCE IT IS MY ONLY SOURCE OF EMPLOYMENT.
Posted from: British Columbia
There are two things that must be considered. Firstly, while in bankruptcy you are not legally able to be a director of a limited / incorporated company. So you will have to transfer your name off as director and have someone else listed.
The second issue will be the value of the corporation. The shares owned in the company are considered an asset and an asset that is not protected in a bankruptcy, meaning the trustee must realize on the value of the shares. So typically the trustee would look at any asset value that exists in the company and subtract any debt that exists in the company to determine the value of these shares. Then to retain these shares you would have to pay the equivalent of this value in to your trustee as part of the bankruptcy.