Disposition of assets of a CCPC in shareholder’s bankruptcy
March 11th, 2007 by Questions
Me and my wife jointly own a Canadian Controlled Private corporation in business for 7 years with significant assets. I own 40% of the shares and she owns 60%. Both of us are employees of the corporation. I’am the director of the company. The paperwork and the accounting are clear for the corporation and all assets can be proved to have been purchased with the corporation’s funds. There has been no commingling of funds. My question is: If I declare bankruptcy can the creditors go after the assets of the corporation?
One Response to “Disposition of assets of a CCPC in shareholder’s bankruptcy”
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March 13, 2007 at 1:34 am, Barton Goth, GCO, Bankruptcy Trustees said:
Now in most provinces the creditors donâ€™t care where the money relating to non-exempt assets comes from, which essentially leaves 3 options. Either your bankruptcy cost increases to you by the value of your shares, or the shares have to be realized on by the trustee directly. This may mean selling shares to your wife or potentially selling off 40% of the assets.
The best thing for you to do is to contact a licensed trusteelocally and discuss this situation. Together you will be able to determine what must happen and what the best way to approach things will be.