Director joint liability for unrecovered company tax arises unless a director proves absence of gross neglect, misfeasance, or breach.

Directors of a private company are jointly and severally liable for tax, interest or penalty that cannot be recovered from the company for supplies of goods or services, unless a director proves the non-recovery was not due to gross neglect, misfeasance or breach of duty. Where a private company is converted into a public company, the statute modifies the application of this joint liability for liabilities incurred during the private-company period and does not apply to any personal penalty imposed on such directors.

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