Personal Law Business Law Packages & Subscriptions
Français About us Sign up Log in
Interactive legal guides Legal frequently asked questions Legal blog Videos
ONLINE LEGAL DOCUMENTS
Frequently asked questions > Company > Business Corporation > If the business corporation becomes insolvent, can the shareholders fetch the responsibility of the directors?

If the business corporation becomes insolvent, can the shareholders fetch the responsibility of the directors?

Both in Canada and in Quebec, the principle of distinct legal personality of the business corporation constitutes the main advantage of the business corporation. It has the status of a legal person. This status confers to it a legal personality independent of the members who have constituted (incorporated in the federal jurisdiction) it. The legal person has its own patrimony, thus it has the capacity to possess assets, have debts. The personal and financial responsibility of the directors is then limited. However, it is necessary to note that in certain circumstances, the courts can fetch the responsibility of the directors, in particular in the cases of breach of duties and gross negligence.

This browser does not support this kind of file. Please download the file to view it: Download the file