Ltd Company Shareholder

April 28th, 2008 by Questions

My business partner is going to file personal bankruptcy. He has loaned $90,000 to the company a year ago. He told me the trustee said since the loan is considered as his asset, the trustee will ask the company to repay that loan once he files bankruptcy. Ours is an incorporated company (we each own 50%) and the company does not have enough cash or assets to repay the $90000. What effect will that have on the company? Will our company be liquidated as a result of that?


One Response to “Ltd Company Shareholder”

, A licensed trustee said:

I am sorry, but you nshould be speaking to a lawyer, not looking for answers on a website. The short answer is the loan to the company is an asset that your partner’s trustee will have to turn into cash. Further, the 50% interest your partner has in the business will also have to be turned into cash and it si unlikely the trustee will want to continue to operate the business – if the business is viable you really need to speak to a lawyer about your options.

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