What is “Director’s Liability?”

I put my life and savings into my incorporated business and it failed.  Now the tax Agency says I owe for something called Director Liability? I have no money or assets to pay such a debt…what can I do?

This is a fairly common scenario.  Simply stated, Director’s Liability is the liability that can be created against a director(s) in situations where the corporation that he or she directed, failed to pay or remit such taxes as net sales tax, GST/HST amounts collected and payroll source deductions taken. The Canada Revenue Agency and other tax authorities by way of the legislation that they administer views the director(s) as the person(s) responsible to ensure that these monies are sent to the tax authority by their corporations; when they are not, they can be held jointly, severally and solely responsible for the remitting of these amounts.

Your situation may be unique and generally speaking if you lack the ability or resources to pay these amounts immediately or in the future, they do not assess you or make your liable.  If they do decide to make you as a director liable, they will need to take specific steps to do that.

As for your options, these type of liabilities can usually be addressed in a bankruptcy filing or a proposal made under the Bankruptcy and Insolvency Act.  It is best if you promptly seek the guidance and advice of a Licensed Insolvency Trustee in these situations as the Trustee is best able to explain and assist your options.

Giving Back

On November 6, 2013 Mission Services of London is having its annual Fall Banquet at the London Convention Centre.  Paul J. Pickering Limited is a proud sponsor of the Mission Services of London organization.  Mission Services of London is a Christian faith-based social service agency with a focus on serving those who struggle with poverty and homelessness: men, women and children. They provide food, shelter, clothing, crisis intervention and rehabilitation among others.

Mission Services of London opened its doors in January 1951 when fourteen Mennonite families purchased and renovated a home at 536 Talbot Street to be a mission providing shelter, food and care for homeless men.

Since that time, Mission Services of London has helped thousands of people of all ages and backgrounds. Today it operates two emergency shelters, an addiction treatment program, a thrift store/outreach program and Community Mental Health Programs for consumers/survivors of the mental health system. Many men and women have had their lives changed significantly as a result of the love, care and respect they received from Mission Services of London during difficult periods of their lives. A little help made a great deal of difference.

Paul J. Pickering Limited is honored to be able to support the work of Mission Services of London.