Enforcement Against Corporations

British Columbia Family Maintenance Enforcement Program

November 9, 2009
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What is "enforcement against corporations"?

As soon as a maintenance order or agreement is filed with the Family Maintenance Enforcement Program (FMEP), we are responsible under the Family Maintenance Enforcement Act for monitoring and enforcing that order.

That means we have the authority to take certain actions to make sure the person who is supposed to pay maintenance (called the payor) makes his or her maintenance payments.

One of those actions – for payors who own all or a major part of a corporation is to make the payor's corporation liable for the payor's family support payments.

That means the corporation, as well as the payor, can be held responsible both for making the payor's regular maintenance payments and for making up any missed payments (called the arrears).

Will you take this action against any kind of corporation?

We will enforce against two kinds of corporations:

where the payor is the sole shareholder, or
where the payor has a controlling interest (either the payor alone holds at least 50 per cent of all shares, or together with his or her immediate family holds at least 50 per cent of all shares).

When will you enforce against a corporation??

Enforcement against a corporation is a serious step. We will take that step only with payors who owe more than $3,000.00 in arrears and only after we have tried – unsuccessfully – to collect the maintenance in other ways.

We will consider making the corporation liable for the payor's maintenance payments only if administrative enforcement does not work, and the payor still does not pay the arrears or contact us to work out a reasonable payment plan.

How will you notify the corporation?

If the payor is the sole shareholder in the corporation, we will send the corporation a notice that it is now liable for the payor's maintenance payments.

If the payor has a controlling interest in the corporation, we will first apply to the court for an order stating that the corporation is liable for the payor's maintenance payments. After the order is granted, we will send the corporation a notice that it is now liable for the payor's maintenance payments.

The notice offers the corporation one last chance to make a payment before we take enforcement action.

Can the corporation request a review of the case?

The corporation may ask the FMEP to review the case if the corporation is either insolvent or believes that paying the maintenance would result in a risk to its solvency. We must receive this request within 14 days from the notice date.

What happens if the corporation does not respond to the notice or request a review?

If the corporation does not respond to the notice with a payment or a request for review within 14 days, we will begin enforcement action against the corporation.

Under the law, we can take the same enforcement action against a corporation as we can against an individual payor. That includes requiring anyone who owes the corporation money to pay it directly to the FMEP (this is called "attaching ?? income), or registering a lien against the corporation's land or other property so that it cannot be sold until the arrears are paid.

We will always consider carefully the effect any enforcement action might have on the corporation.

How long will you continue with enforcement against the corporation?

We will continue enforcement action until:

the payor (or the corporation) has paid the arrears and has been making regular payments for some time, or
the payor sells the corporation (or the controlling interest), and all payments owing up to the date of the sale are made, or
the payor's case is withdrawn from the FMEP.

Document Revised: November 1, 2005