Corporate bankruptcy and shareholders liability

If my limited company has debt that it cannot pay, are the shareholders liable for the debt if we declared bankruptcy, and could the company continue to exist as an inactive corporation because it has a bad debt that it hopes to recover some day?

One Response to “Corporate bankruptcy and shareholders liability”

Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said...

If the company files an Assignment in bankruptcy the shareholders, in their capacity as shareholders, are not liable for the debts. If the shareholders are also directors of the corporation they may be liable for director liabilities as set out by the statute. The company cannot continue unless it gets discharged from the bankruptcy. This is not likely to happen unless the debts are in full with accrued interest. Any assets of the corporation, such as recoverable debt will be the responsibility of the trustee.