If I am a director of a holding company in Ontario, am I also liable for the subsidiary's debts?

Not automatically. Each corporation in a corporate group — holding company and operating subsidiaries — is a separate legal person. Being a director of a holding company that owns shares in a subsidiary does not, by itself, make you a director of the subsidiary or personally liable for the subsidiary's debts. The subsidiary's obligations are the subsidiary's own, and its creditors look to the subsidiary, not to its parent or the parent's directors.

However, the analysis changes significantly if you are appointed as a director of both the holding company and the subsidiary — in which case you owe duties to each corporation separately and can face director liability in respect of each. Many parent-subsidiary structures involve common directors across the group, and those directors must be careful to act in the best interests of each corporation independently, which can create tension when the interests of the holding company and subsidiary diverge.

Personal liability can also arise if you sign documents on behalf of the subsidiary without authority, give personal guarantees of subsidiary debts, or if a court pierces the corporate veil because the subsidiary was used to perpetrate fraud. Structuring a corporate group to achieve liability insulation requires careful planning, and the veil-piercing risk increases if corporate formalities are not observed across the group.