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Inside Internal Controls

News and discussion on implementing risk management

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personal liability

Supreme Court clarifies test for personal liability of directors for oppressive conduct

The general principles articulated by the Supreme Court may help guide directors and counsel in considering whether corporate conduct could lead to personal liability in future cases.

 

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Director’s liability for corporate negligence

Plaintiffs often cast the net broadly to capture every party with assets or insurance capable of satisfying a potential judgment. Directors are often named as defendants in claims related to the negligence of the companies they oversee.

 

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A fiduciary obligation does not (necessarily) a fiduciary make

Regular readers may recall the article we wrote on the topic of officer liability. There we commented on circumstances in which officers of corporations under the Canada Not-for-profit Corporations Act (CNCA) (whether continued to it or incorporated there) will be exposed to personal liability. Not long after that piece was written, an Executive Director of a corporation considering continuing to the CNCA who is an employee and not an officer in accordance with the corporation’s by-laws, asked us if she would owe a fiduciary duty to the corporation under the CNCA. On reflection, we concluded that the new officer provisions in the CNCA create a statutory framework wherein employees could be held liable for a breach of the same duties that are applicable to directors of those corporations. We left, for the moment, the question as to whether these duties were “fiduciary” or not.

 

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Why every charity should consider incorporation

Before a group can be registered as a charity, there has to actually be some legal thing to register. This means that every charity faces the choice of which legal structure to use. A charity can be constituted as a trust, an unincorporated association, or a corporation.

 

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Ontario Not-for-Profit Corporations Act

Ontario’s legislature wasted no time following the passage of the Canada Not-for-profit Corporations Act to enact its own Act to revise the law in respect of not-for-profit corporations (Bill 65). The Bill received royal assent on October 25, but the government hasn’t set a date for it to come into force yet.

 

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