Directors' Liability under the Ontario Corporations Act

The Corporations Act (CA) and regulations of Ontario set out the liability of the directors and officers of not-for-profit corporations.

Summary

Despite the distinct legal status of the not-for-profit corporation, directors and officers bear some liability under the CA for their involvement with the corporation.

Directors of a not-for-profit corporation are jointly and severally liable to the employees, apprentices and other wage earners thereof for all debts due while they are directors for services performed for the corporation of the corporation for debts not exceeding 6 months' wages and up to 12 months' vacation pay.

A director's duty is to the corporation and its members. As such, all directors must act honestly and in good faith with the best interests of the corporation in mind when exercising powers and discharging duties.

All directors of a not-for-profit corporation must comply with the CA, Letters Patent, by-laws and other instruments governing the affairs of the corporation.

Directors may be responsible for statutory penalties for failure to make appropriate filings and to keep proper records for the corporation.

There may also be potential liability under federal and/or other provincial statutes. Questions of potential legal liability should be directed to legal counsel.

For further information:
please call (416) 314-8880 or 1-800-361-3223
visit the Web site:
Ministry of Government Services
http://www.cbs.gov.on.ca

Publications

Note: Some of these publications originate with organizations that are not subject to the federal Official Languages Act or the French Language Services Act of Ontario and may not be available in both official languages.

A number of reference books are available at libraries or bookstores, including:

Ontario Corporations Manual;
Ontario Corporations Law Guide;
Canadian Corporate Secretary's Guide;
Business Incorporator's Handbook
Business Corporations Act (also available online at http://www.e-laws.gov.on.ca);
"Self Counsel Series" for Ontario business corporations (which can be purchased through Publications Ontario at 1-800-668-9938 or (416) 326-5300 or online at http://www.publications.gov.on.ca).

Please be advised that neither the Companies and Personal Property Security Branch nor the COBSC can give legal advice. The following information is intended as a general guide only. For further assistance or legal information, please refer to the publications listed below and/or consult legal counsel.

DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.

Ontario Contact(s):
Registering in person (processing over the counter):
Companies and Personal Property Security Branch
Ministry of Government Services (MGS)
2nd Floor
375 University Avenue
Toronto, Ontario M5G 2M2
Telephone: (416) 314-8880
Fax: (416) 314-4852
Toll-free (information): 1-800-361-3223 (in Ontario)
TTY (hearing impaired): (416) 212-1476

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Directors' Liability under the Ontario Corporations Act - Not-for-profit Corporations

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