This list is not exhaustive and it does underline the need to engage a legal professional when considering a corporate bankruptcy in Canada. Our team can assist you with managing a corporate bankruptcy and clearly understanding the laws and processes that need to be followed to address your specific circumstances. Every corporate bankruptcy is unique and as such, addressing those unique issues requires professional consultation.
The BIA supersedes many of the other statutes that exists, though it has been modified to refer specifically to additional legislated guidance on certain issues.
Entities that are governed by the BIA in terms of guiding the bankruptcy process include:
- Any business that resides or carries on operations in Canada,
- Including partnerships and unincorporated associations or organizations,
- Financial institutions and farmers are specifically exempt and addressed under different statutes.
Protection Options for Corporate Bankruptcy
As a corporation is a separate legal entity in Canada, in most cases there is a clear break between the debts and assets of a corporation and the debts and assets of the corporation’s owner. A distinction here is that unpaid source deductions (income tax, EI, CPP) and sales tax liabilities can become owed by directors of a corporation after a corporation has gone bankrupt.
When a corporation begins the process of declaring bankruptcy, there are protective provisions in place to protect the current financial position of the corporation.