Bankrupting a limited company
July 13th, 2010 by Questions
What happens to my husband`s personal credit if he bankrupt`s his limited compnay? He is 100% shareholder in this company.
Posted from: Alberta
One Response to “Bankrupting a limited company”
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July 14, 2010 at 9:41 am, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:
If your husband places his limited company into bankruptcy there is no impact on his personal debt. Bankrupting the company will only affect corporate debt. Anything that he has signed personally has nothing to do with the corporate bankruptcy.
As well, certain debts survive onto the director of the bankrupted corporation, these include and debt personally guaranteed, any outstanding GST or a portion of the payroll remittances. IF there are any of these types of debt they will still be his responsibility to pay.
This is partially why many limited companies simply close and the director has to file bankruptcy personally.