I've received mixed reactions from interviewers about my former employer due to its aggressive business practices and founder's personality. They either liked or hated it and I'm concerned it's hurting my job prospects. Should I omit the company from my CV and reposition the time I spent there to appear as part of my current consulting activities?
Don't omit the company from your CV. You'd be lying by omission and we strongly advise against lying when you're job hunting. If you got the job, the truth would likely come out, putting you in a much worse situation. We recently spoke with an employer who discovered that a new recruit had lied about something minor during his interview and application process. He was fired even though he was a good employee. Don't put yourself in this kind of position, especially since any real or imagined bias you face from interviewers isn't about anything you've done or could have controlled.
Your best solution is to approach companies by sending a well-crafted letter outlining your experience and skills without mention of past employers' names. Don't send your CV. Then when called for interviews, you can comfortably discuss your previous employers since you'll know that the companies are already interested in you.
If you can't do away with the CV, don't allow your association with this company to hurt your chances. Beat the interviewer to the punch. Be the first to mention your time at this company and put a positive spin on the experience. Focus on how working there has helped you to become better at what you do. Ask interviewers about their views of the company and its founder and dispel any myths you can by responding with what you know is true rather than let gossip and rumor spread.
No matter the reputation of your past employer, it's unlikely that reasonable people will penalize you just for working there. We're sure that others who've worked for this company moved on to find other jobs without denying their relationship with it. You can do the same.