liabilities of directors definition

liabilities of directors

Directors are usually not personally liable for ultra vires acts (or for the intra vires acts that exceed the powers vested in them), but may be sued by the stockholders (shareholders) for breach of the directors' duties. They are also generally not liable for errors of judgment, but may be sued for negligence by third-parties or stockholders. However, they are held strictly liable for failure to withhold and/or remit withholding taxes such as employee source deductions, and sales and commodity taxes such as general sales tax or value-added tax.

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