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Incorporation FAQs

(Frequently Asked Questions)
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 Answers by Jeffrey S. Lowe

  1. Am I personally liable for the debts of the company?

  2. Do I need to have a seal for the company?

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1. Am I personally liable for the debts of the company?

Normally, shareholders are not liable, unless they have personally guaranteed a debt of the company. Directors and officers may become personally liable for actions or debts on behalf of the company in a number of cases, including:
  • Each director or officer may be liable for up to two months' wages for certain employees, under the Employment Standards Act.
  • Many statutes, including the Criminal Code, provide that if the company has committed an offence, every director or officer who authorized, directed, condoned or participated in that offence, may be personally liable.
Consult your lawyer for specific concerns about liability in your line of business.

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2. Do I need to have a seal for the company?

In B.C., a company seal is not mandatory. Most documents can be executed on behalf of the company by clearly indicating that the signer is doing so in his capacity as a director or officer of the company.

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