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Actual for You - Bankruptcy - The Director's Liability
Let's talk about how many companies use third party distribution channels to leverage their overall organizational resources to increase sales. In today's day and age, a lot of companies are using third party channels for reselling and supporting their products. Those channels include OEMs, system integrators, value added resellers, manufactures reps, agents, and distributors, among others. And they are used both domestically as well as internationally to push product out through multiple channels to their target markets. Yet many companies view this channel activity as bei
CRA also has only 2 years t
The young man took his place behind the lectern, preparing to address the graduating class. He had earned the right to make this speech by having the best grade point average over the last four years. In addition to being the valedictorian he was graduating with academic honors. So were two thirds of the members of his class.It's not just this high school. I checked around a bit and found that grades appear higher and there are more "honors" graduates, even though official standards don't seem to have changed much. And it's not just high school. At Princeton, in 2003, 47
If you sit on a Board of Directors of a corporation then exposure to liability exists under various statutes. For example, unpaid wages and vacation pay, workplace liabilities, liabilities under corporate statutes as well as environmental liabilities are a major concern of the corporate director.
Amounts owing to the Crown with respect to taxes are the most common of the liability claims. Unremitted source deductions which consists of income taxes, employment insurance and Canada Pension Plan premiums from employee wages is the liability that the Crown has been very aggressive in collecting in recent years. The Crown is also being more aggressive in the collection of other taxes such as unpaid sale taxes and the ever controversial Goods and Service Tax (GST).
A common scenario in creating director’s liability is that a business that is struggling financially is using the unremitted source deductions as capital to keep the corporation in business rather than close the doors. However, when the corporation realizes that the unremitted source deductions is not enough capital to keep the operations going, the company goes out of business. Canada Revenue Agency (CRA) has a statutory right to go after the directors for unremitted source deductions plus interest and penalties.
For CRA to successfully claim against a director it must meet certain requirements under the Income Tax Act. CRA must file a certificate in respect of the corporations tax liability and CRA must attempt to have execution against the corporation and the execution must be returned unsatisfied. In the case of a liquidation in bankruptcy, CRA must prove its claim within 6 months of the date of bankruptcy. If these actions have not been met by CRA then the director has no liability.
CRA also has only 2 years t
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A common scenario in creating director’s liability is that a business that is struggling financially is using the unremitted source deductions as capital to keep the corporation in business rather than close the doors. However, when the corporation realizes that the unremitted source deductions is not enough capital to keep the operations going, the company goes out of business. Canada Revenue Agency (CRA) has a statutory right to go after the directors for unremitted source deductions plus interest and penalties.
For CRA to successfully claim against a director it must meet certain requirements under the Income Tax Act. CRA must file a certificate in respect of the corporations tax liability and CRA must attempt to have execution against the corporation and the execution must be returned unsatisfied. In the case of a liquidation in bankruptcy, CRA must prove its claim within 6 months of the date of bankruptcy. If these actions have not been met by CRA then the director has no liability.
CRA also has only 2 years t
With the rapid down fall of world economy and dot-com companies in recent years many brick-and-mortar companies and new start-ups ask themselves: To Be Online or Not to Be Online?Not long time ago, I read a comment of a well-known industry observer, where he stated that companies that are not selling through Internet by 2007 will probably become extinct. As dramatic as it might feel, although exaggerated, but there are some truths in it.Consider this: Although diminishing due to bad economy, average growth of e-commerce is around 25 % per year. 81% of small busine
A common scenario in creating director’s liability is that a business that is struggling financially is using the unremitted source deductions as capital to keep the corporation in business rather than close the doors. However, when the corporation realizes that the unremitted source deductions is not enough capital to keep the operations going, the company goes out of business. Canada Revenue Agency (CRA) has a statutory right to go after the directors for unremitted source deductions plus interest and penalties.
For CRA to successfully claim against a director it must meet certain requirements under the Income Tax Act. CRA must file a certificate in respect of the corporations tax liability and CRA must attempt to have execution against the corporation and the execution must be returned unsatisfied. In the case of a liquidation in bankruptcy, CRA must prove its claim within 6 months of the date of bankruptcy. If these actions have not been met by CRA then the director has no liability.
CRA also has only 2 years t
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For CRA to successfully claim against a director it must meet certain requirements under the Income Tax Act. CRA must file a certificate in respect of the corporations tax liability and CRA must attempt to have execution against the corporation and the execution must be returned unsatisfied. In the case of a liquidation in bankruptcy, CRA must prove its claim within 6 months of the date of bankruptcy. If these actions have not been met by CRA then the director has no liability.
CRA also has only 2 years t
What’s the basic of Search Engine Optimization? SEO is a big field and growing tremendously. Understanding SEO basics is essential for you as a web site owner. At times you can always do a bit of search engine yourself if you are a website owner. Knowing the basics of SEO is essential for it.What is SEO?Search engine optimization, targeted at getting a top placement in search engines is a technique used to get top ranking. There are a few key considerations to keep in mind while doing your SEO.Your keyword in respect of the corporations tax liability and CRA must attempt to have execution against the corporation and the execution must be returned unsatisfied. In the case of a liquidation in bankruptcy, CRA must prove its claim within 6 months of the date of bankruptcy. If these actions have not been met by CRA then the director has no liability.
CRA also has only 2 years to attempt to collect the liability from the director. If the 2-year period passes then the director escapes any liability for the unremitted deductions. In order to attempt to collect from the director, it must be established that the funds could not be collected from the corporation or from the Receiver or Trustee in bankruptcy.
CRA has first priority on all assets of a bankrupt company. If a company files a bankruptcy CRA has priority over all other secured creditors even those who had security on the assets of a company prior to CRA having a debt owed, such as a General Security Agreement by a banking institution. This priority is given to CRA through the Income Tax Act. If the company continues to go forward in a receivership CRA must be paid for any arrears in crown taxes.
There are only a few defenses available to a director in order to avoid payment of the liability. In order to be liable you must be a ‘director in law” at the time the source deductions were not remitted. For example, the individual may not have been properly appointed as a director or may have resigned prior to the failure to remit.
If the above exemptions do not apply then the only defense is the “due diligence” defense as set out in the Income Tax Act. This defense provides that the director is not liable for the corporation’s failure to remit source deductions where he/she exercises the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would exercise in a
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