Insolvency Lawyers – Business Commercial Company Law - Canada
Corporate insolvency in Canada is governed by the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Winding-up and Restructuring Act. Corporate insolvency happens when a business can no longer earn as much money as it is spends and is unable to cover the balance from resources. A Corporate insolvency usually raises complex issues that require multiple insolvency lawyers practicing in different aspects of insolvency. Advice needs to be given by specialist insolvency lawyers regarding taxation liabilities, the debtors, the creditors, the companies involved, their directors and the company administrations.
Trading Whilst Insolvent
The directors of a company often meet with commercial insolvency lawyers prior to making any decision on bankruptcy. If the directors believe that the company is in danger of trading whilst insolvent they need to take urgent legal advice to prevent an unlawful act. The directors should instruct a team of accountants and insolvency lawyers to begin sorting through the company’s papers, to audit the accounts and make the decision as to whether or not the company needs to go into bankruptcy. If the decision is made to put the company into bankruptcy then legal papers are filed with the bankruptcy court and the process begins. In due course the creditors are notified that there is an application to wind up the company on behalf of the various creditors and they are entitled to make their representations.
Corporate insolvencies tend to be dealt with by law firms with a large business and corporate department on account of the wide range of resources necessary to carry out the work that’s entailed to complete the matter. Corporate insolvency lawyers advise on all matter relating to company bankruptcy issues on behalf of liquidators, trustees, directors, creditors, debtors and shareholders. Liquidators may seek advice on their powers and on the causes of action they have available. Creditors may seek advice on their options. Company directors often seek advice on whether or not their proposed course of action is illegal or unlawful.
Corporate insolvency lawyers give advice to a wide range of interested parties but most often to directors shareholders and creditors. Property lawyers deal with security, mortgages and transfer of real estate. If there are deeds to be changed or managed as a result of the bankruptcy, a member of a law firm legal team will attend to it. When dealing with a particular insolvency issue at the court level, our insolvency lawyers provide a dynamic, flexible legal team that together studies all aspects of the insolvency, works through the court system and finalizes all issues related to the legal question at hand :-
- The Bankruptcy and Insolvency Act provides a legislative framework for the liquidation of the assets of an insolvent individual, corporation or partnership, and the distribution of the proceeds in a fair and orderly way among the creditors.
- The Companies' Creditors Arrangement Act provides a legislative framework for the reorganization of insolvent corporate debtors.
- The Winding-up and Restructuring Act provides an alternative framework to the Bankruptcy and Insolvency Act for the liquidation and distribution of an insolvent corporation's assets among its creditors.