Malcolm Obrien was asked by Theresa Cho to be a director of her company. Malcolm agreed, but apart from accepting the title of director he had no idea what was going on in the business. There were never any formal board of directors meetings. The business went bankrupt and Revenue Canada sued Malcolm for $10,000 for income tax withheld by the company from employee wages but not remitted. The money was used to try to keep the business afloat. The employees are also suing for five months' unpaid wages. Which of the following is true?

Question

Quizplus · Accepted Answer

Malcolm is liable for both the wage claim and the Revenue Canada claim because as a director, he has fiduciary duties and responsibilities, including ensuring that taxes and wages are paid.

Malcolm Obrien Was Asked by Theresa Cho to Be a Director