Employment Insurance Act

Marginal note:Liability of directors to pay penalties

• 46.1 (1) If a penalty is imposed on a corporation under section 38 or 39 for an act or omission, the directors of the corporation at the time of the act or omission are, subject to subsections (2) to (7), jointly and severally, or solidarily, liable, together with the corporation, to pay the amount of the penalty.

• Marginal note:Limitations on liability

  (2) A director is not liable unless

  • (a) a certificate for the amount of the corporation’s liability for the penalty has been registered in the Federal Court under section 126 and execution for that amount has been returned unsatisfied in whole or in part;

  • (b) the corporation has commenced liquidation or dissolution proceedings or has been dissolved and a claim for the amount of its liability has been proved within six months after the date of commencement of the proceedings or the date of the dissolution, whichever is earlier; or

  • (c) the corporation has made an assignment or a bankruptcy order has been made against it under the Bankruptcy and Insolvency Act and a claim for the amount of its liability has been proved within six months after the date of the assignment or bankruptcy order.

• Marginal note:Defence of due diligence

  (3) A director is not liable if the director exercised the degree of care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the act or omission for which the penalty is imposed.

• Marginal note:Limitation period

  (4) No action or proceedings to recover any amount payable by a director shall be commenced more than six years after the occurrence of the act or omission for which the penalty is imposed.

• Marginal note:Amount recoverable

  (5) If execution referred to in paragraph (2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

• Marginal note:Preference

  (6) If a director pays an amount in respect of a corporation’s liability that is proved in liquidation, dissolution or bankruptcy proceedings,

  • (a) the director is entitled to any preference that Her Majesty in right of Canada would have been entitled to if that amount had not been paid; and

  • (b) if a certificate that relates to that amount has been registered, the director is entitled to an assignment of the certificate to the extent of the director’s payment and the Commission shall make the assignment.

• Marginal note:Contribution from other directors

  (7) A director who has satisfied a claim under this section is entitled to contribution from the other directors who are liable for the claim.