Corporate Bankruptcy, was derived from the term "banca rotta", which directly translates to "broken bench". In medieval times, when merchants had trouble paying their debts, they would have their trading benches broken by violent collectors. Bankruptcy laws are traceable to ancient Italy and France, where creditors were allowed to include the person as property or assets, enabling people to be sold off as slaves in order to repay their debts. Modern Bankruptcy laws, first adopted in England in 1542, allowed creditors a remedy against debtors other than violence and imprisonment. Over the next few centuries, laws were adapted to the changing needs and economic structures of their various nations.Quebec Corporate Bankruptcy refers to the insolvency of a business rather than an individual. In the case where businesses are incorporated, they become separate entities from their directors, fiscally and legally. In the case where a business has NOT been incorporated, but simply registered to one’s personal name, a personal bankruptcy will be in effect. The individual and the business are legally considered to be one and the same, therefore all assets will be included in the procedure, and none of the business or personal assets can be held separately.
When facing bankruptcy procedures, which are essentially the same in both personal or business settings, only assets of the company will be turned over to the Trustee in Bankruptcy due to the owner’s liability protection. The Trustee, is then mandated to sell off the assets in order to distribute funds to creditors. In most cases, the directors are not liable for any lack of funds thereof; the creditors are simply left to absorb the losses. The limitations of this protection extend to any employee wages, source deductions, and sales taxes (GST/QST) that are owed by the company. Any of these debts will in turn become a personal responsibility of the directors. A company can be placed into bankruptcy by creditors, directors of the company or as a result of any defeated or annulled proposal. The main reasons for forcing such a procedure is to ensure the proper and orderly liquidation of company assets, as well as to ensure there have been no illegal transactions or payments within the scope of verification of a company’s records.
If you feel you may be experiencing some of these issues in your current commercial situation, and If Corporate Bankruptcy is an option, our specialized commercial team will meet with you to review your company’s assets and debts in order to further explain the procedure. The company directors can cooperate with the Trustee and help to assist him but they will definitely be relieved of all the frustrations of the financial operations from that moment on.
We offer our business clients clear advisory consulting and creditor negotiations to ensure a complete personalized service with positive results.
Let our team evaluate your business needs and offer turnaround solutions for your insolvency issues.
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