What is a Shadow Director?

A shadow director is a person who effectively directs or controls a company, even though they are not officially appointed or recognized as a director. This person may not have the title of director or be formally appointed as such, but they exert significant influence over the company’s decision-making processes.

Under Canadian corporate law, a person is considered to be a shadow director if the directors of the company are accustomed to act in accordance with the person’s instructions or wishes. This can include situations where a person is not officially appointed as a director, but their advice or instructions are regularly followed by the directors.

While shadow directors do not have the same legal responsibilities as appointed directors, they can still be held liable for their actions if they exercise significant control over the company and their actions result in harm to the company or its stakeholders. As such, it is important for companies to be aware of any individuals who may be acting as shadow directors and to ensure that they are held accountable for their actions in the same way as appointed directors. If you have any questions, please contact us at info@falconlawyers.ca.

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