Small Business Owners And Directors Liabilities In Insolvency Situations

Most business owners who are incorporated are now aware that if the company does not pay its various sales taxes, employees’ salaries, vacations or DAS, – then as the administrator of the company you are responsible for these liabilities.

Did you know? If, as a tax planning strategy, you declare a dividend instead of taking a salary (and deduct the appropriate withholdings), the company is insolvent and it owes corporate income taxes - the government can claim from the outstanding amounts from you as a Director.

How do you protect yourself? Always pay your government remittances on time. Be sure to remember that you and the company are two separate legal entities. This means that even if you are the sole owner or director – you still have obligations.