Category Archives: Intermediate Investor
An insolvent company is a company which is not capable of paying all of its debts. Bankruptcy is a legally declared inability of an individual or an organization to repay its creditors. In Canada, the Bankruptcy and Insolvency
Voluntary Bankruptcy under BIA An insolvent company can voluntarily file for bankruptcy under the BIA along with the submission of a statement of all its assets and liabilities. All of the company’s unencumbered assets are then transferred
Distribution of Assets In liquidations under the BIA, the assets of an insolvent company are left in the hands of a trustee, who has the power to sell them with the permission of the board of inspectors of the estate.
Section 136 of the BIA establishes the following priorities for the distribution of money from the bankrupt company. All claims of a higher class are paid before any claims of the next class. Outlined below is the
While in a BIA reorganization procedure, an automatic stay of proceedings is imposed on secured and unsecured creditors, this stay does not apply to secured creditors who take possession of their collateral before the filing of bankruptcy
The BIA and CCAA rules are being modernized through a comprehensive insolvency reform package referred to as ‘Bill C-12’. The following section discusses some of the important changes proposed in the BIA and CCAA regulations.
Dividends are paid out of a company’s after-tax corporate profits. Corporate income is subject to federal and provincial corporate income taxes. In the Canadian tax system, all provinces and territories set their own corporate and personal income tax
In 2005, several important changes to Canada’s dividend tax credit rules were announced. Federal dividend tax credit rates were increased, and as a result effective tax rates now range from as low as 3% to over 30%, depending on the tax
While the dividend tax credit system was implemented to eliminate the double tax effect on dividends from a company’s after-tax profits, the system can also create tax disadvantages. The following section discusses the benefits and limitations of
Keeping the limitations of the dividend tax credit in mind, the Canadian government’s 2007 Economic Statement, announced reductions to the federal general corporate income tax rates to 15% by 2012 in a gradual manner over 4 years. To reflect
