What Liabilities Do The Directors Have?
• Source deductions (i.e. the income taxes, CPP premiums and EI premiums) withheld from employee payroll. • HST/GST • Provincial sales tax • Employee vacation pay earned and unpaid • Employee wages earned and unpaid • Employee severance obligations • Environmental clean-up costs In Bankruptcy, the Directors will often be exposed to liability for some of these types of debt. The Directors will need to obtain legal advice if claims are being made against them. Some of these claims can be settled or eliminated within a formal restructuring process but often they must be specifically addressed and relief is not automatic. For this reason, an insolvency professional will need to know the status of the claims prior to filing the restructuring plan. It is common for owners of a business to guarantee some of the business debt even if the business is incorporated. The existence of guaranteed debt can be a complicating factor in determining a course of action. In some cases, it may be necessary
