What Are the Duties of an Administrator in a Company?

Many people often minimize the crucial administrative skills and responsibilities of business administrators (or directors) in the corporate world. Ignoring these obligations can cause serious problems with government authorities. Directors must therefore fully understand their administrative duties to avoid legal and financial issues.

The company director plays a crucial role in making sure the company is well managed and runs smoothly. Directors have a legal and moral responsibility to the company, its employees, and other stakeholders.

The Role of a Company’s Administrator

The director oversees the company’s activities and ensures that everyone is fulfilling their role. Their fundamental duty is to act with prudence and diligence, always taking into account the interests of the company. They must demonstrate management skills, as well as honesty and loyalty. They are also required to put aside their own interests and serve the company to the best of their ability.

Directors help shape and carry out the company’s strategy. They set goals, making sure that they are aligned with the organization’s vision and support the smooth running of daily operations. Good time management is also essential for achieving these goals.

They help create and apply internal policies to guide company practices. Directors also ensure that the company complies with all legal obligations. This includes laws relating to governance, taxes, human resources, and data protection. If a breach occurs, a company director may be held personally responsible.

The Responsibilities of Administrators Towards Tax Authorities

Company directors have significant legal obligations to the tax authorities. These responsibilities are crucial to ensuring the company’s compliance with tax regulations. Here is an overview of the main tax responsibilities of directors.

Compliance With Tax Reporting Requirements

A registered business must file tax returns regularly. One of the most fundamental responsibilities of a director is to ensure that the business complies with its tax reporting obligations.

This includes filing and paying income tax returns and consumption tax returns (GST/QST) within the required deadlines. Meeting deadlines is essential to avoid penalties or late fees. Effective reporting requires attention to detail and accuracy.

Maintaining Accounting Records

Directors must ensure that the company maintains adequate financial and tax records in accordance with Canadian law. These records must be kept for a period of six years from the end of the last tax year. They must also be accessible if a tax audit occurs. Rigorous management of these documents makes it possible to prove the company’s tax compliance, with duties including the verification of records.

Payment of Taxes

It is the responsibility of the administrator to ensure that the company pays taxes owed to the tax authorities on time. This includes income tax, sales tax, and other levies imposed by provincial or federal authorities. The administrator must oversee cash management to ensure that funds are available to cover these payments.

The Obligations of Directors as Employers

Compliance With Labour Law

Employers must comply with applicable labour laws in Quebec. This includes standards relating to schedules, wages, vacations, workplace safety, and termination procedures, which are part of the director’s broader administrative tasks.

Payroll Deductions

Payroll deductions or deductions at source (DAS) are amounts that the employer deducts directly from the employee’s salary. These amounts are paid to the tax authorities and social security schemes. These deductions are mandatory and are used to cover various taxes.

The administrator is personally responsible for paying the following contributions if there is non-payment by the company:

• Quebec income tax withholding;
• employee and employer contributions to the Quebec Pension Plan (QPP);
• employee and employer contributions to the Quebec Parental Insurance Plan (QPIP);
• your employer’s contribution to the Health Services Fund (HSF);
• your employer’s contribution related to labour standards;
• your employer’s contribution to the Workforce Skills Development and Recognition Fund (WSDRF).

Payroll Records

Employers are legally required to keep payroll records. These must contain detailed information on the wages and deductions made for each employee. Rigorous management of payroll records ensures compliance with legal requirements and transparency in payments. Here again, a detail-oriented approach is essential to avoid costly mistakes.

Personal Liability

The director of a company who fails to withhold and pay source deductions and consumption taxes may be personally liable for the unpaid amounts. Similarly, directors are also liable for unpaid wages and vacation pay owed to employees for a maximum period of six months. Directors in office at the time of the default are jointly and severally liable for the payment of the amounts due. In the event of non-payment by the company, bankruptcy, or insolvency, the tax authorities will seek payment from the directors.

« Moi-même comme administrateur de ma propre compagnie, ce n’est pas toujours évident de bien gérer le cashflow afin de toujours provisionner les taxes et les DAS à remettre aux autorités fiscales. Il est très important de prendre les choses en amont et d’avoir un budget mensuel qu’on met régulièrement à jour afin d’éviter les mauvaises surprises » – Mathieu Roy, SAI.

A director must fully understand their many roles and obligations. If you have any questions about directors’ responsibilities, please do not hesitate to consult one of our advisors at M. Roy & Associés. Contact us for a free consultation.