Corporate Bankruptcy in Ontario
My husband & I opened up a company in Dec.’03. I am the 100% shareholder, president/director & secretary. This company is registered with on a First Nation in Ontario. He is an employee. We seperated June ’05 and are no longer working together. He has since run the company into the ground. We currently have a $30,000. unsecured line of credit which we both have signing authority for with a bank(overdrawn), a $23,000.loan which we both signed for and a $87,000. loan that only I personally guaranteed $25,000. of it for. My question is:how much of this would I be solely responsible for? Would he be responsible for any of it? Just checking out my options.And if I am unable to pay the creditors, can they come after me personally?
Thank you
A little stressed
Firstly, you will be responsible for 100% anything you have personally guaranteed and if your husband would not be responsible for any of the guarantee unless he signed it as well. Secondly, as a director of a limited company you will be responsible for any outstanding GST, source deductions (employee portion) and outstanding wages (the limit will depend on the province you live in. The unfortunate thing is that while you are president, and director this would suggest that you are the only one that will be responsible for any shortfall. However, you must be cautions with the other debts, if you have guaranteed these, or pledged any personal assets or even if there is unusual legislation in your province you may be found responsible for a portion of these as well.
The best thing to do is to contact a licensed trustee in your area, bring him all the original documentation you can and he will be able to answer more specifically to the province in which you live.