At Yanch, Dey & Associates Ltd., we work to educate you on the processes of filing for your business bankruptcy in the GTA. We invite you to learn about the commercial bankruptcy method, and call us if you have any questions.
WE HELP YOU FILE FOR BUSINESS BANKRUPTCY IN THE GTA
There are two types of business bankruptcies:
- Sole proprietorship or a partnership
- Incorporated businesses
Businesses are responsible for the debts of the company. However, because there are two different types of business structures in Ontario, there are two slightly different bankruptcy processes.
SOLE PROPRIETOR BANKRUPTCY
Owners of sole proprietorships or partnerships are responsible for the debts of the business and the personal assets of themselves and their partners. The assets of the business and the owner’s personal assets are grouped together. This becomes a personal bankruptcy.
An incorporated business gives a small business owner a liability protection. In this case, a bankruptcy would not affect them personally.
INCORPORATED COMPANY BANKRUPTCY
An Incorporated company is a legal entity. An incorporated company can own things and receive credit or loans, but they are their own being. The owners are shareholders of the incorporated company but they do not own the property or incur the debts of the company. This means, when an incorporated company goes bankrupt only the incorporated company is responsible for any losses – not the owners or directors of the company.
The shareholders credit is not affected when the company goes bankrupt, only the company. Oftentimes the bankrupt company doesn’t operate afterwards and the assets are sold.
Going bankrupt or starting a bankruptcy is basically the same; the company is forced into or voluntarily seeks bankruptcy protection. Furthermore, all of the company’s property assets are turned over to the Licensed Insolvency Trustee, who then sells the property of the bankrupt company and distributes the money to any creditors.
EMPLOYEES OF THE BANKRUPTCY COMPANY
The Licensed Insolvency Trustee will review the payroll records and officially notify your employees that the company has gone bankrupt. As employees of a bankrupt corporation Service Canada has a program that ensures all employees are reimbursed for all or part of their wages. They will also address severance, termination pay and any outstanding holiday pay.
The staff and Licensed Insolvency Trustee of Yanch Dey & Associates Ltd. are interested in helping you with your financial issues. We offer a free consultation for you to come and discuss your issues. Many times just talking about your issues will help you to proceed and get the help you need. Call now to discuss your finances.