Bankruptcy Canada - GST

Bankruptcy Canada Questions & Answers

Author:		Anonymous
Date:		Feb 1, 2008
Question:		I have a bit of a complicated question but I think it is worth asking. I am a director of an incorporated company that has failed and now owes payroll taxes and GST. It is my understanding that even if we file for corporate bankruptcy these debts have to be payed. Is this true and would we have to pay the full amounts?? Also the numbered company in question owns part of another business that is currently operating,would the shares of that company simply go vacant if the failed company was to go bankrupt? Would it make more sense for us to disolve the failed company...and would that clear any debts? Again if we disolve would the shares of the operating company go vacant? Thank you for your attention.
From:		Gary Alger & Associates Inc.
Date:		Feb 3, 2008
Answer:		Canada Revenue Agency can raise a Director's liability assessment against all Directors of the failed company for both GST and Source Deductions. They can assess the full balance owing against all of the Directors. If the failed company is placed into bankruptcy, the shares that it owns in the operating company would have to be valued and sold for fair market value. The funds received from the shares would be paid to the creditors of the failed company. Any other remaining assets of the failed company would be sold for the benefit of the creitors of the failed company. Revenue Canada would have a super priority over the realizations for the balance owing for source deductions. Gary Howitt phone: (780) 442-1983 Alberta Bankruptcy