Company debts can become personal debts. It is important to understand the links between the Company and directors (including guarantors of Company debts). These debts need to be considered and managed when dealing with a Company in an insolvency situation. We have the experience to help.
The most common director obligations are those imposed under the Federal Income Tax Act and Excise Tax Act.
Under the Income Tax Act, directors are personally liable for payroll source deductions that are withheld but not remitted to the Canada Revenue Agency (“CRA”).
Under the Excise Tax Act, directors are personally liable for net HST or GST that has been collected but not remitted to CRA.
Directors do not generally have personal liability for corporate income taxes owing by the Company.
Other Federal or Provincial acts can impose liability on directors, including liability for environmental damage related to company activities, unpaid wages, and vacation pay and workers’ compensation premiums.
It is possible to settle personal debts of a corporate director in a successful Proposal filed by the Company. The Bankruptcy and Insolvency Act only provides for the settlement of director liabilities that are imposed by Federal or Provincial legislation.
If the director has liability because the director signed a personal guarantee for a company debt, the Proposal will not generally discharge this obligation.
Powell Associates Ltd. is a Licensed Insolvency Trustee. We are experienced, hands-on insolvency practitioners who understand the personal impacts of major financial stress;
You won’t be stuck in an assembly line process.
You will expect and receive prompt responses and resolution of issues from our supportive and experienced team.
We will review your debt solution options, including filing a consumer proposal or personal bankruptcy.
We help Canadians with overwhelming debt get fresh financial starts.
Once you file a consumer proposal or personal bankruptcy, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.
We offer free consultations to review your financial situation and practical debt resolution options. Contact us to discuss your situation over the phone, a video chat, or in-person in Saint John, Moncton, Fredericton, Charlottetown, Dartmouth, or Miramichi.