HELPING YOU SOLVE YOUR DEBT PUZZLE
Corporate Bankruptcy vs Personal Bankruptcy
Quite often as a Licensed Insolvency Trustee and a Chartered Professional Account we deal with business and their owners who are experiencing financial difficulties.
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Canadian Corporate Bankruptcy vs Personal Bankruptcy: What’s the difference?
At times both the business and the individual business owner needs to both deal with their debts. However, both the corporation and the owners of the company are separate legal entities and have different legal responsibilities. The question that often arises from owners, directors, and shareholders of small and medium corporations is:
“Should I declare a business/corporate bankruptcy, personal bankruptcy or both?”
Business owners need to understand the separation between the corporate business and the individual. Certainly this is especially true in situations where personal and business debts and assets have become entwined.
If You’re a Sole Proprietor…
If you are a sole proprietorship, then your personal assets and personal debts cannot be separated from those of the business. If you are a sole proprietor or partnership, and have business debts, then you also personally have debt. In these situations, when you are considering a business bankruptcy, it is the same thing as a personal bankruptcy.
If It’s a Limited Company…
In Canada, a limited company is a separate person or a separate legal entity under the law.
In Canada, both individual and corporation have financial options when insolvent. Both can declare bankruptcy or enter into a debt repayment plan to creditors by way of a Proposal. If a company files a restructuring Proposal, the hope is that the company will continue to operate. A Proposal can allow companies to shed some debt, cancel contract, or other financial hindrances all in one process to become financially stable. In bankruptcy the company will stop operating immediately and the assets are sold for the benefit of the creditors.
Corporate assets and debts are separate and distinct from the shareholders’ own personals assets. A company is a separate legal entity.
What if the Company cannot continue?
If the company is not viable or the creditors do not agree to the restructuring plan, it may be necessary to go through a formal corporate bankruptcy process. A formal corporate bankruptcy only takes place if there is sufficient assets available for distribution to the unsecured creditors.
Get Help From Experienced Debt Solutions Managers
Our business team as C.E. Craig & Associates Inc have helped business and people eliminate their debts for over 20 years. Our experience and business advice has helped business shed debt and become viable. is here to help you make that decision and walk you through the process. We understand how difficult the decision to file bankruptcy or to consider a business proposal. But sometimes the best option for businesses in financial trouble is to reach out before its too late.
Let us guide you through the process, so we can help your company get the best possible outcome. We’ve compiled a list of our most frequently asked questions to help give you the answers you need. Our business team is available by phone or email if you have additional questions or if you need to discuss your situation.
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How We Help Businesses
Other Corporate Insolvency Services
Receivership
Receivership is an option when there is a corporate insolvency. A Receivership is an option for a secured lender when a debt is unpaid and in default.
Corporate Bankruptcy vs Personal Bankruptcy
Discover the differences of corporate versus personal bankruptcy, and what is right for you.
Division 1 Proposal
A Division I Proposal is a formal procedure governed by the Bankruptcy and Insolvency Act and is available to both businesses/corporations, as well as individuals.
Business Bankruptcy Resources & Information
Read the latest guides, insights, and resources prepared by our team to help you have peace of mind.
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Reach out to a debt solutions manager today
There can be many solutions to debt problems and every person’s story is unique. At C.E. Craig & Associates Inc. we take the time to listen to you – to help find the best option for you. Every journey begins with one single step.