{"id":46545,"date":"2026-02-17T16:59:05","date_gmt":"2026-02-17T21:59:05","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=46545"},"modified":"2026-02-17T16:59:06","modified_gmt":"2026-02-17T21:59:06","slug":"revived-corporation-revived-liability-not-so-fast-says-the-tax-court","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/corporate-tax\/revived-corporation-revived-liability-not-so-fast-says-the-tax-court\/","title":{"rendered":"Revived corporation, revived liability? Not so fast, says the Tax Court"},"content":{"rendered":"\n

Directors of CBCA[1]<\/a> governed corporations often take comfort in the two\u2011year limitation period on personal liability under subsection 323(5) of the Excise Tax Act (\u201cETA<\/strong>\u201d)[2]<\/a>. After resignation and the passage of time, the risk of a personal assessment is generally expected to expire. But what if the corporation is dissolved for failure to file and later revived at the Minister\u2019s request? Does that revival also resurrect the director\u2019s exposure to personal liability?<\/p>\n\n\n\n

In Maragos v. The King<\/em><\/a>, the Tax Court of Canada (the \u201cCourt<\/strong>\u201d) addressed this question and clarified when a former director of a dissolved and later revived CBCA-corporation ceases to be a director for purposes of the two-year limitation period. The decision is an important development at the intersection of the CBCA and the ETA\u2019s director\u2019s liability regime, and offers meaningful guidance for former directors who have stepped away from the corporation.<\/p>\n\n\n\n

I. Background<\/h2>\n\n\n\n

The appellant was a director of a corporation incorporated under the CBCA. On July 24, 2018, the corporation was dissolved pursuant to section 212 of the CBCA due to failure to file its annual return. Subsequently, the Minister of National Revenue (the \u201cMinister<\/strong>\u201d) applied to have the corporation revived, with revival taking effect on December 24, 2018.<\/p>\n\n\n\n

Following the revival, the Minister attempted to collect outstanding GST debts from the corporation. When those efforts proved unsuccessful, on May 14, 2021, the Minister assessed the appellant for director\u2019s liability under section 323 of the ETA \u2013 which allows the Minister to pursue directors for certain unremitted tax amounts (\u201cAssessment<\/strong>\u201d). The appellant formally resigned as a director on May 15, 2019, and appealed the Assessment.<\/p>\n\n\n\n

II. Issue<\/h2>\n\n\n\n

The central issue before the Court, framed under section 58 of the Tax Court of Canada Rules<\/a> <\/em>(General Procedure) [3]<\/a> was: when did the appellant last cease to be a director (either de jure <\/em>or de facto<\/em>) for the purposes of subsection 323(5) of the ETA?<\/p>\n\n\n\n

III. Position of the parties<\/h2>\n\n\n\n

The appellant argued that the Assessment was issued outside the statutory limitation period. Although he formally resigned as a director in May 2019, he maintained that his directorship ended upon the corporation\u2019s dissolution in July 2018. The respondent, however, contended that the revival of the corporation automatically reinstated the appellant as a director, thereby resetting the limitation period to the date of his formal resignation.<\/p>\n\n\n\n

IV. CBCA revival and ETA director liability: textual, contextual, and purposive analysis<\/h2>\n\n\n\n

The Court undertook an analysis, structured around the text, context, and purpose of the relevant statutory provision, specifically subsection 209(4) of the CBCA, which governs the revival of dissolved corporations.<\/p>\n\n\n\n

A. Textual analysis<\/h3>\n\n\n\n

The Court found that the text of the provision alone, while slightly favoring the appellant\u2019s position, provides little clarity on how directors should be treated upon revival.<\/p>\n\n\n\n

B. Contextual analysis<\/h3>\n\n\n\n

The Court found that a contextual analysis of the provision modestly supported the appellant\u2019s interpretation. The Court examined related CBCA provisions such as:<\/p>\n\n\n\n