A business investment loss (BIL) is a special kind of capital loss that happens when you sell or dispose of socks or debts of a Small Business Corporation (SBC) to a person at arms length.
One-half of the BIL is called an Allowable Business Investment Loss (ABIL) and can be written off against any income. This is a little different from a standard capital loss (known as an allowable capital loss), that only permit losses to be applied against capital gains.
If you own the stocks of a SBC that is insolvent and no longer have a market value or own the debts that are considered a bad debt, you can elect to have your stocks or debt disposed of at nil value under s.50(1) to claim the ABIL. Under this provision, you are also considered to have re-acquired the stocks or debts at nil value at the end of the tax year.
Since you still retain ownership, you may be able to re-use the corporation for another purpose and recoup your investment. Of course, you will have to report and pay tax on the amount recovered.