Gehlen Dabbs Lawyers
Call Us
T: 604 757 9380
Call Us : 604 757 9380
Main navigation

February 2012 Archives

Director liability and "due diligence" defence

A properly incorporated company is a separate "person" in the eyes of the law, and a corporation's directors and officers are generally-speaking not liable for the corporation's debts. As an exception to this general rule, a number of provincial and federal statutes impose personal liability on directors (and sometimes officers and others as well) for amounts owing by the corporation, where the corporation itself fails to pay. Two such statutes are the Income Tax Act for payroll deductions, and the Excise Tax Act for net GST/HST owing. Both these statutes provide a "due diligence" defence to the director, exonerating a director "where the director exercised the degree of care, diligence and skill to prevent the failure [to remit taxes] that a reasonably prudent person would have exercised in comparable circumstances".

RRSPs exempt

One of the few "creditor-proofing" steps that actually works involves that old-fashioned investment your parents and accountant have been recommending for decades: RRSPs. Under changes to the law which came into force in July, 2008, money invested in RRSPs is exempt from creditors.

contact us today

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an lawyer-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy