What is Director Liability?
In Canada, under various laws, notable being the Excise Tax Act and the Income Tax Act, the Canada Revenue Agency has the ability to pursue directors of corporations for certain liabilities of those corporations. Under the Excise Tax Act and the Income Tax Act, director liability is sometimes assessed where a corporation is unable, or has neglected to pay debts for HST or employee source deductions. For the keen, the CRA has released a discussion paper outlining the consequences that can be faced by directors.
Consequences of a Director Liability Assessment
Once the CRA assesses a director personally, it has the same power against the director that it would if the director did not pay personal income tax. That means that the CRA can seize personal bank accounts, seize personal assets (including homes, cars, belongings, etc), lien your home and even garnish future earnings. The results can be devastating.
We can assist directors in limiting their exposure to such laws. Where the government has assessed liability against directors, we can help with legal solutions that reduce or eliminate the debt.
Ross Advisory Group
If the CRA has assessed you personally for the debt of a corporation, call Ross Advisory Group today at 416-800-8756. We work with directors in the Greater Toronto Area to reduce or eliminate their liability for corporate debt under the various director liability rules.