Marra – Tax Court of Canada finds that the two years for a director’s derivative assessment ran from handing a resignation to the company’s lawyer, who did nothing with it

The company (financed by your spouse but which has been run by a questionable character) is on shaky grounds, your spouse has suggested that you resign and the only other directors are the shady character, who is being sued for having misappropriated company funds, and his inactive spouse. What do you do?

Rip J found that in these circumstances it is sufficient to hand a written resignation to the lawyer who has acted for the company, even though he never gets around to filing the resignation in the minute book (or notifying the company's branch of the resignation, as required) – so that from the time of giving him the resignation, the two year period for barring CRA from making a derivative assessment under ITA s. 227.1(4) and ETA s. 323(5) starts running.

Neal Armstrong. Summary of Marra v. The Queen, 2016 TCC 24 under ITA s. 227.1(4).