Business law...

Hi. I was a shareholder with a very small (30) business in BC. I resigned as director a few years ago and am now finally being paid out for the remaining money owed to me. Once this is done (shortly), is there ANY possible way the remaining shareholders/owners of the business can come after me in the future? Do you think it is necessary to have them sign a complete release so there are no future issues or reasons they can come after me?


Asked over 3 years ago in British Columbia
Categories: Business Law

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Mike C Stewart, P.Eng

Answer by Mike C Stewart, P.Eng

VerifiedBritish Columbia lawyer

Yes, there are many ways you can still be liable even though you have resigned. You could be liable for:
-employee pay
-wrongdoings of the company while you were there
-taxes
-environmental harm
-wrongdoings TO the company while you were there (e.g. causing the company to lose money through your actions, or stealing, among many other things)
I highly recommend you ask the company to a) indemnify you and b) sign a release agreeing not to sue you in the future.
Hope that helps.

Posted over 3 years ago

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Contact Mike C Stewart, P.Eng, or search the Lawyer Directory.


Comment

Hi Mike Thank you for your response. Further to your comment "I highly recommend you ask the company to a) indemnify you and b) sign a release agreeing not to sue you in the future" ... do you have a release form you can provide me? Many thanks.

Posted over 3 years ago


Mike C Stewart, P.Eng

Answer by Mike C Stewart, P.Eng

VerifiedBritish Columbia lawyer

This is something you would want a lawyer to draft for you. Also the indemnification is something you would have to negotiate with the company.

Posted over 3 years ago

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Contact Mike C Stewart, P.Eng, or search the Lawyer Directory.


Comment

Ok, thanks, Mike. I'm not completely clear though on what the idemnification would cover. What kind of cost would I be looking at if you were to draft the release for me?

Posted over 3 years ago


Mike C Stewart, P.Eng

Answer by Mike C Stewart, P.Eng

VerifiedBritish Columbia lawyer

You would want the company to indemnify you for any losses you suffer as a result of your having been a director for the company. You would want to enumerate the possible losses for certainty. Getting an agreement like this drafted will probably cost somewhere between $1,000 to $2,000.

Posted over 3 years ago

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Contact Mike C Stewart, P.Eng, or search the Lawyer Directory.


Comment

Hi again. Wouldn't a release signed by them (the company) agreeing not to sue me in future be enough?

Posted over 3 years ago


Mike C Stewart, P.Eng

Answer by Mike C Stewart, P.Eng

VerifiedBritish Columbia lawyer

No, because you could be on the hook for other liabilities such as taxes, employee wages, etc. CRA and employees can come after you regardless of whether the company agreed not to sue.

Posted over 3 years ago

Please note that this is for informational purposes only and does not constitute legal advice to you. Legal advice pertaining to your particular situation can only be provided by a lawyer who has met with you to obtain all pertinent background information necessary to give you a formal legal opinion. For formal legal advice, hire a lawyer (many give a free first consultation). Contact Mike C Stewart, P.Eng, or search the Lawyer Directory.

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