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Quiz: Amounts held in trust and director's liability

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1 What is the legal character of amounts withheld from employees' pay but not yet remitted? Deemed held in trust for the Crown, separate and apart from the employer's own property The employer's own property until the remittance date Property of the employees until remitted An ordinary debt of the employer to the Crown

Answer key unconfirmed — rests on 2 unverified claims.

2 How far does the deemed trust reach where source deductions have not been remitted? To the specific funds withheld, if still identifiable To the employer's bank accounts only To the employer's property, but never ahead of a secured creditor To property of the employer, and to property held by a secured creditor that would otherwise be the employer's, to the extent of the unremitted amount

Answer key unconfirmed — rests on 1 unverified claim.

3 Before assessing a director for a corporation's unremitted source deductions, what must CRA generally have done? Obtained a court order authorising the assessment Nothing — a director may be assessed at any time Given the director written notice one year in advance Generally exhausted collection against the corporation, by registering a certificate with execution returned unsatisfied, or by filing a claim in its liquidation, dissolution or bankruptcy

Answer key unconfirmed — rests on 3 unverified claims.

4 A director resigned some time ago and asks how long their exposure lasts. A director may not be assessed more than two years after they last ceased to be a director, but the resignation must be effective under the governing corporate law to start that period Two years from the date they notified CRA of the resignation Indefinitely, for amounts arising while they were a director Two years from the date the amounts fell due

Answer key unconfirmed — rests on 3 unverified claims.

5 A director says she worked hard to repay the arrears once she discovered them, and relies on due diligence. Does that assist? No — there is no due diligence defence to director's liability Not on its own — the defence concerns steps taken to prevent the failure, rather than efforts to remedy it afterwards Yes, provided the arrears were fully repaid Yes — remedial efforts establish due diligence

Answer key unconfirmed — rests on 2 unverified claims.

6 A director has been assessed and believes both that the corporation never owed the amount and that she should not be liable in any event. What can she dispute? Only her personal liability; the underlying amount is settled against the corporation Both the underlying amount and her liability for it, by objecting and appealing Only the underlying amount Neither — a director's assessment is final

Answer key unconfirmed — rests on 1 unverified claim.

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