Can the directors be held responsible?

In theory, both in Canada and in Quebec, a director cannot be held responsible for the obligations contracted by the business corporation by virtue of the principle of immunity. The directors can also be held responsible when they contravene certain laws or regulations.

In Quebec, following a breach of their duties or obligations, the directors can be held responsible if there is proof of an extra-contractual fault. The extra-contractual responsibility is provided in the Civil Code of Québec. It provides that any person has the duty to respect the rules of conduct which are imperative upon him so as not to cause damage to others.

It is relevant to ensure that the business corporation takes out an insurance to cover the responsibility of its directors.