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What if you own your own business
August 26th, 2013
If you own an incorporated business, you may be wondering what will happen to it if you file a consumer proposal. Will you have to sell it or turn it over to your proposal trustee? In most cases, probably not.
As long as your financial difficulties are personal and not tied into your corporation, chances are that you’ll be able to complete your consumer proposal without having the process affect that business. You’ll still own the corporation, and you’ll remain in charge of it.
If your corporation is the one in financial difficulty, however, the situation changes. There is still a proposal process available (if appropriate to your company’s situation), but instead of filing a consumer proposal which is limited to individuals, your business will file a Division I proposal. (This type of proposal is also available both to individuals who owe more than $250,000.)
If both your business and you personally are in financial difficulty, you may need to file separate proposals: a consumer proposal for yourself, and a Division I proposal for your company. You can work with the same trustee for both processes.
If you operate a sole proprietorship or a partnership, you may still be eligible to file a consumer proposal. However, you should consult with your proposal trustee. A proposal trustee is the best person to advise you on your options.