Free Consultation

Bankruptcy – Board of Directors

Can an individual who has declared bankruptcy sit on a board for a non-profit registered society as a “PRESIDENT” with signing authority to the bank accounts?

Posted from: British Columbia

One Response to “Bankruptcy – Board of Directors”

Gareth Slocombe, Trustee | C.I.R.P | C.A said...

The laws under the Bankruptcy and Insolvency Act do not specifically restrict a person from acting in this role. However, an undischarged bankrupt has an obligation to disclose his status to all persons with whom he enters into business transactions or obtains credit from of more than $1,000. As such, it would be advisable for the individual to advise the board of his status. There may also be society bylaws which specifically restrict such an individual from acting on the board or having signing authority. Under certain circumstances, it can be possible for the bankruptcy court to grant a release from a “statutory disqualification” in cases where there was no misconduct by the bankrupt and the bankruptcy was caused by misfortune.