Board of Directors LP/LLP

[jboire99]

Hello Everybody,



Here is my inquiry: please keep in mind this is a serious discussion question, there is no one right answer: What do you see as the cost/benefit of participating as a board member of LP/LLPs or corporations, for RE investment and construction projects?

 

[Thomas Beyer]

Benefit for you: gain knowledge & personal connections.

Cost: time & potential risk as directors have potential personal liabilities for unpaid GST/HST, tax liabilities or HR payments, CPP/EI ..

 

[bizaro86]

There might be some potential liability risk as well, if you perform your duties with negligence and you/the corporation are not sufficiently insured.



Regards,



Michael

 

[Pheenix]

Is this a formal board with registration or an informal advisor board with no actual oversight authority?



The former board will have the power and authority to 'direct' the management/operations team to do or not do various things. It will require that you ask hard question on a number of issues and that the board, both as individuals and as a group, have asked the questions and received full answers from the operating team. Someone will have to record the discussions on these points.



The latter acts more as a sounding board and is not directive in nature. Therefore it is unlikely to attract liabilities (I'm not a lawyer so this opinion and understanding).



So the costs are the risks and the benefits are the education and networking opportunities.



Also if you are a limited partner investor and take on a board role you may have effectively given up the protection that position otherwise provides.