Directors and Officers Liability 2

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The bad news… • Directors can be held personally liable. • Usually, this liability is financial, but it may include jail time. • Ignorance is not a defence. • Resignation is not necessarily a defence. • Board indemnity may not be enough. • Directors may be liable for nonperformance. • Sometimes shareholders are de facto directors. Dentons Canada LLP 15 Directors’ liability for unpaid payroll/corporate taxes and GST/HST 16
Directors’ liability for unpaid corporate taxes & gst/hst • Examples • Tax Liability? • Technical Requirements • Due Diligence Dentons Canada LLP 17 Directors’ liability for tax • Examples: • Corporation is having cash flow problems. Dips into GST/HST collections to meet obligations to other creditors (for example, payroll). • Corporation has properly deducted and remitted employee portion of CCP/EI obligations. New payroll clerk inadvertently failed to meet employer’s obligations. • Corporation hired an independent contractor. • Deakin v. The Queen, 2012 TCC 270 • [24] … if a corporation and its directors choose to unilaterally “borrow” from Canadian taxpayers and the public purse, Canadians get the benefit of security akin to personal guarantees of the directors. Dentons Canada LLP 18
Page 1 and 2: Directors’ and officers’ liabil
Page 3 and 4: Legal duties • Corporate law •
Page 5 and 6: Corporate law - selected statutory
Page 7: Environment - provincial • Enviro
Page 11 and 12: Directors’ liability for tax - Te
Page 13 and 14: Directors’ liability for tax - Du
Page 15 and 16: Discussion of recent case law • L
Page 17 and 18: Current cases to consider - Piercin
Page 19 and 20: Recent developments - Due diligence
Page 21 and 22: Recent developments - Fraud • Fra
Page 23 and 24: Performance of duties • Attend al
Page 25 and 26: Directors’ liability for taxes -

Directors and Officers Liability 2

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