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Debra
Debra, Lawyer
Category: Canada Law
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In BC, in a private corporation, sole shareholder resides in

Customer Question

in BC, in a private corporation, sole shareholder resides in Germany and is director, the in house accountant is the canadian director, most employees are in union, the business may be closed down or sold off due to long running failure.
?- is it possible for employees to sue directors for failure to act in best interest of the company (for past 7 years existing GM has lost over $2m and owner has not replaced him regardless of requests by other director).
?- is it possible for other director to sue shareholder/director
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.

It is not possible for the employees to sue the directors. The Directors manage the corporation but the corporation is the employer and the employees have to be treated appropriately in their capacity of employees but they have no interest at all in what is best for the corporation.

A minority shareholder can sue under what is called an oppression remedy which is available to a minority shareholder when the corporation or shareholder is being harmed by the actions of a majority shareholder.

Let me know if you need any further clarification.