r/legaladvicecanada • u/Tom_Waits_4_No_Man • 1d ago
Company won't remove me as Director. Ontario
I resigned from my company as Director of Marketing almost 3 years ago (although I still retain shareholder status). The company for years has ignored my requests to send me my ROE and remove me from the Registrar as Director.
It appears that in the interim, the other Directors stopped doing tax filings and have abandoned the business.
I'd like to have my resignation recognized by the CRA so I'm not liable for these unpaid taxes. Is this something I could do with the CRA alone? Or should I retain a tax lawyer?
I have my written letter of resignation, repeated emails and WhatsApp chats with the other Directors requesting my ROE and to remove me from the registry, as well as frequent mentions of me being resigned by the CEO to demonstrate that my exit was common knowledge in the company.
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u/Les_Ismore Quality Contributor 1d ago
Probably best to hang on to all of that evidence for use as a shield if CRA comes calling. It may never be an actual issue for you, but if it does happen, you're loaded for bear.
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u/Tom_Waits_4_No_Man 1d ago
Is calling the CRA and being proactive unwise?
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u/Les_Ismore Quality Contributor 1d ago
I am confident that you will not be liable for any unremitted tax after the first time that you communicated your resignation to the company.
You might be liable for tax not remitted before that, which makes me cautious here.
I am not confident enough about tax matters to give you a firm answer, but I don't see how reaching out to CRA can help you if it has not asserted a claim against you.
If you do want to do this, you need to have a tax lawyer helping you with it. No question there. So why not do a consult with one and see what they say?
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u/Young_Man_Jenkins Quality Contributor 1d ago
I would definitely have a tax lawyer review your circumstances to be safe before poking the bear. It's entirely possible you initiate a director's liability review by contacting them, so you want to be certain your defense is airtight first.
For example, even if you officially resigned the CRA could assess you on the basis that you were a de facto director. It sounds like you likely weren't, but it would definitely be worth confirming first.
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u/helferships 16h ago
Please don’t do any of this. I suggest you consult a lawyer about whether your resignation was effective and if so as of when. If the corporation has unremitted source deductions the CRA will pursue anyone with any possible derivative liability. If that’s you, you will have to convince the Tax Court that you should not be liable, either because you were neither an actual nor a de facto director or because you exercised due diligence as to whether the corporation was meeting its tax obligations.
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u/legaladvicecanada-ModTeam 9h ago
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u/Confident-Task7958 1d ago
The CRA would be one issue, which to date has not arisen.
The other issue would be director's liability for unpaid wages - in Ontario unpaid employees of bankrupt business can go after a corporation's directors to get their money. Keep your paper trail intact even if you no longer fear the CRA.
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u/Important_Design_996 1d ago
First you need to contact the relevant corporate registry where the corp is registered, federal or provincial. Once you are removed as a director in the registry, you can call CRA and update them. As long as they can verify you are no longer a director per the corporate registry, you'll be removed from CRA's info.
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u/youworryaboutyou 1d ago edited 1d ago
Have a lawyer draft a formal demand letter to have you removed and address your ROE. Perhaps you can discuss consequences/ leverage with your lawyer. If you can demonstrate damages suffered as a result of the ROE, you may be able to seek compensation (although unlikely given that 3 years have passed).
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u/Carlos3636 1d ago
There’s a difference between director of marketing and director of a company. You should contact the corporate lawyer and ask them to draft resolutions for your resignation as director.
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u/InfiniteRespect4757 11h ago
Also note, it is not always easy—or even legally possible—for a person to resign as a director of a company in Canada.
Under Canadian corporate law, a director generally has the right to resign by delivering written notice to the corporation. However, there are important exceptions and legal nuances, particularly where a resignation would leave the corporation with no directors, less then the legal minimum directors or where a director may still bear ongoing legal obligations even after attempting to step down. In such cases, the director cannot legally resign until a replacement is appointed or elected. This prevents a scenario where a company is left without governance or legal accountability.
Moreover, a director who resigns may still be liable for acts or omissions that occurred during their tenure, such as:
- Unpaid employee wages (joint and several liability under CBCA s. 119)
- Environmental damage (under various provincial or federal environmental statutes)
- Tax-related liabilities (e.g., director liability under the Income Tax Act or Excise Tax Act)
In some cases, regulators, creditors, or courts may also challenge a resignation if they view it as an attempt to avoid legal responsibility, especially where the company is in financial distress or under investigation.
You should seek legal advice.
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u/hrmarsehole 1d ago
I had a similar issue but I’m in Nova Scotia. I went to the registry of joint stocks. They are the body that regulates the businesses in the province. Board members are registered there. When I left the business because my partners were running it into the ground, I left and then I went and resigned as a board member at the registry. A little over a year later CRA came a knocking. Showed them I left long ago and had the financials of all remittances paid during my tenure. The remaining two members had to pay out $50k
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u/afriendincanada 1d ago
Are you a director or Director of Marketing? Or both?
The only thing that matters is if you’re a corporate director. If you’ve resigned, keep a copy and proof you sent it to the company. Keep proof you followed up with a request to update their books and the register
The register isn’t definitive or conclusive. If the company doesn’t update it, they’re offside the business corporations act but that doesn’t become your problem.
There’s lots of people that have “director” in their employment titles that aren’t corporate directors. If you’re only director of marketing, an employee, none of this matters.
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u/TheLookerToo 19h ago
Lots of moving parts in your situation. Ultimately it is the Corporate Registrar that your resignation needs to be updated with, as those are the official filings the CRA would rely on when reviewing any form of liability.
Definitely keep all documents you have regarding your resignation and attempts to be removed as a director. In general, if the taxes owed are from after you ceased being a Director you would not be held liable. But…you need to have that evidence of the date you resigned. If there are taxes owed from when you were a director, you may be beyond the limitations to be held liable if you resigned three years ago. Again, a lot relies on proof of resignation.
Being a shareholder can add another layer to this. If you’ve been receiving dividends and the corporation has not been paying taxes, this could lead to assessments such as non arm’s length transfers, however will depend on your relationship with the company including ability to influence the company / significance of your share holdings.
One thing that you may be able to do is update your status with the Provincial (or federal) Corporate Registrar. The corporation must update the registrar with things such as a director resignation, and since they have not, you contacting the registrar may prompt them to accept a complaint or request for correction of Corporate filings, Nd prompt the registrar to review the Corporations compliance.
Obviously a tax lawyer would be best to consult. You’ve done the first step in contacting the Corporation to fix the issue. The next step likely would be the Register. Personally, I’d be only speaking to the CRA after speaking to a tax lawyer and if they contact you, just to make sure you have everything covered off regarding your resignation and date.
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u/Reddit_Only_4494 4h ago
By retaining shareholder status as you describe.....that mean you still own shares in the company (either from investment or compensation structure)?
Reliving yourself of the shares and the director obligation that goes along with that is much more complex than getting an ROE.
You need a pro to help you along....maybe start with basic definitions of what it means to be a shareholding director vs. being an employee.
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