Every Director of a corporation holds a special position in the structure of a business, giving them substantive control over the operations of the business. As a result, Directors have a legal obligation to prudently manage the affairs of the business.
If a Director deviates from this obligation, they can be personally be held liable. For example, a Director can personally be liable for the following:
- up to six months wages for each unpaid employee
- unpaid source deductions of the corporation (including income tax, CPP and EI, and GST)
- monies paid out as dividends when the corporation is, or which result in the corporation being, insolvent
- when the Director has a conflict of interest, or a material interest, in a transaction involving the corporation
- corporate liability under The Environmental Protection and Enhancement Act, Hazardous Products Act, Occupational Health and Safety Act, Transportation of Dangerous Goods Act, Securities Tax and Canada Pension Plan Act
The foregoing is not a comprehensive list. Before you become a Director, or if you have any concerns about your current exposure as a Director, please contact us.
Please contact us today to discuss how we can help you.