Insights
Oct 23, 2025
Mackisen
Director’s Liability 2025 — Protect Yourself From Corporate Tax Debt, CRA Penalties, And Legal Exposure
Most business owners don’t realize that being a company director in Canada comes with personal financial risk. Under federal and provincial law, directors can be held personally liable for unpaid corporate taxes, GST/HST, payroll deductions, and even interest and penalties. In 2025, CRA and Revenu Québec are enforcing these rules more aggressively than ever, pursuing directors years after a business closes.
A simple missed remittance, an unfiled return, or a cash flow delay can turn into personal legal liability—especially if your corporation falls behind on payroll or GST/HST obligations. The CRA has the power to pierce the corporate veil, seize personal assets, garnish wages, and hold directors accountable for company debt. But with the right strategy and legal representation, you can prevent or reverse these actions before they destroy your financial stability.
At Mackisen CPA Auditors Montreal, we defend corporate directors and business owners from personal tax liability. Our CPA auditors and tax lawyers analyze your situation, negotiate with CRA and Revenu Québec, and implement legal strategies that protect your assets, limit your exposure, and restore compliance—fast.
Legal and Regulatory Framework
Income Tax Act (Canada)
Section 227.1: Holds corporate directors personally liable for unremitted source deductions (CPP, EI, and income tax).
Excise Tax Act (Canada)
Section 323: Makes directors liable for unremitted GST/HST owed by their corporations.
Tax Administration Act (Quebec)
Establishes similar liability for directors regarding QST, payroll, and source deductions.
Canada Business Corporations Act (CBCA)
Section 119: Directors can be personally liable for up to six years after leaving office if due diligence cannot be proven.
Mackisen applies due diligence defenses and documentation to demonstrate that you acted reasonably and in good faith—key to overturning personal liability assessments.
Key Court Decisions
Buckingham v. The Queen (2011 FCA 142): Directors are personally liable for unremitted source deductions if they cannot prove proactive due diligence.
Wheeldon v. The Queen (1999): The CRA must show that the director had effective control at the time the debt arose.
R. v. Carroll (2008): Personal liability can extend beyond resignation if the CRA proves continued influence or neglect.
These rulings confirm that CRA does not need to prove fraud—only that taxes were not remitted under your watch.
Why Director’s Liability Matters
The corporate veil does not always protect you. CRA can—and will—hold you personally accountable for the company’s unpaid tax obligations if they believe you failed to act responsibly. Common triggers include:
Unremitted payroll deductions or GST/HST/QST.
Failure to file corporate tax returns.
Insolvency or bankruptcy without proper tax clearance.
Delays in remitting withheld employee deductions.
Lack of due diligence documentation (minutes, resolutions, financial oversight).
CRA can pursue directors up to six years after resignation, and interest continues to compound daily. Protecting yourself requires immediate, documented action.
Mackisen’s Director Protection and Resolution Strategy
Exposure Assessment: Review all corporate tax accounts to identify potential personal liability risks.
Due Diligence Documentation: Compile board minutes, correspondence, and financial records proving active oversight.
Negotiation with CRA/ARQ: Challenge the personal assessment or negotiate settlement terms.
Appeal Filing: Submit a formal objection if CRA has issued a Director’s Liability Assessment.
Corporate Restructuring & Compliance: Implement systems to prevent future exposure and restore tax remittance integrity.
Our defense strategy focuses on proving due diligence—your strongest legal shield against personal tax liability.
Real Client Experience
A Montreal business owner received a $147,000 Director’s Liability Notice after a company closure. Mackisen proved he had resigned before the debt arose, secured cancellation of the assessment, and restored his credit rating.
A Quebec tech startup founder faced dual CRA and Revenu Québec payroll liability claims totaling $82,000. Mackisen negotiated a reduced settlement of $8,700 and implemented a new compliance structure for future operations.
Common Questions
Can CRA really make me pay my company’s taxes? Yes, under Section 227.1 of the Income Tax Act and Section 323 of the Excise Tax Act. Mackisen can defend or limit this exposure.
What is a Director’s Liability Assessment? It’s a legal notice making you personally responsible for unpaid corporate taxes, interest, and penalties.
Can I avoid liability after resignation? Only if you can prove due diligence and timely resignation filings.
How can I protect myself as an active director? Review corporate tax accounts regularly and ensure all remittances are filed—Mackisen can manage this for you.
Why Mackisen
At Mackisen CPA Auditors Montreal, we specialize in protecting directors and business leaders from financial ruin. We know how to navigate CRA’s complex enforcement system and how to present the documentation that clears you from liability. Our team has successfully defended hundreds of directors against unjust claims.
We work discreetly, professionally, and with genuine care for your financial security. When your personal assets, home, or reputation are on the line, Mackisen is your strongest line of defense.
Call Mackisen CPA Auditors Montreal today for your 2025 Director’s Liability Defense Consultation. The first consultation is free, and your protection starts immediately.
