38 (1) Where a corporation has failed to deduct or withhold an amount as required by subsection 153 (1) of the Federal Act, as it applies for the purposes of this Act, or has failed to remit such amount, the directors of the corporation at the time the corporation was required to deduct or withhold the amount, or remit the amount, are jointly and severally liable, together with the corporation, to pay any amount that the corporation is liable to pay under this Act in respect of that amount, including any interest or penalties related thereto.  R.S.O. 1990, c. I.2, s. 38 (1); 2004, c. 16, s. 3. Exception (2) A director shall not be liable under subsection (1) unless, (a) a certificate for the amount of the corporation’s liability referred to in subsection (1) has been registered in the Superior Court of Justice under subsection 31 (2) and execution for such amount has been returned unsatisfied in whole or in part; (b) the corporation has commenced a liquidation or dissolution proceeding or has been dissolved and a claim for the amount of the corporation’s liability referred to in subsection (1) has been proved within six months after the earlier of the date of commencement of the proceeding and the date of the dissolution; or (c) the corporation has made an assignment or a receiving order has been made against it under the Bankruptcy and Insolvency Act (Canada) and a claim for the amount of the corporation’s liability referred to in that subsection has been proved within six months after the date of the assignment or receiving order.  R.S.O. 1990, c. I.2, s. 38 (2); 1996, c. 24, s. 23; 2001, c. 23, s. 140; 2004, c. 16, s. 3. Standard of care (3) A director is not liable for a failure under subsection (1) where the director exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.  R.S.O. 1990, c. I.2, s. 38 (3); 2004, c. 16, s. 3. Limitation period (4) No action or proceeding to recover any amount payable by a director under subsection (1) shall be commenced more than two years after the director last ceased to be a director of that corporation.  R.S.O. 1990, c. I.2, s. 38 (4); 2004, c. 16, s. 3. Amount of liability (5) Where the execution referred to in clause (2) (a) has been issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.  R.S.O. 1990, c. I.2, s. 38 (5); 2004, c. 16, s. 3. Crown preference (6) Where a director pays an amount in respect of a corporation’s liability referred to in subsection (1) that is proved in a liquidation, dissolution or bankruptcy proceeding, the director is entitled to any preference that Her Majesty in right of Ontario would have been entitled to had such amount not been so paid and, where a certificate that relates to such amount has been registered, the director is entitled to an assignment of the certificate to the extent of the director’s payment, which assignment the Provincial Minister is hereby authorized to make.  R.S.O. 1990, c. I.2, s. 38 (6); 1993, c. 29, s. 2; 2004, c. 16, s. 3. Directors’ recovery (7) A director who has satisfied a claim under this section is entitled to contribution from the other directors who were liable for the claim.  R.S.O. 1990, c. I.2, s. 38 (7); 2004, c. 16, s. 3. Section Amendments with date in force (d/m/y) 1993, c. 29, s. 2 - 14/12/1993; 1996, c. 24, s. 23 - 30/11/1992 2001, c. 23, s. 140
- 5/12/2001 2004, c. 16, s. 3
- 1/01/2004 General