Amendments to the Canada Business Corporations Act affecting registers of individuals with significant control
By Kimberly Bungay and Colton Smith
Since June of 2019, corporations formed under the Canada Business Corporations Act have been required to prepare and maintain a register of individuals with significant control (an “ISC Register”). ISC registers are to contain information on individuals who hold “significant control” over the corporation.
The requirement for ISC Registers was implemented in order to combat money laundering and other financial crimes, and to bring Canada in line with its international partners, in preventing financial crimes.
Who has significant control?
An “individual with significant control” over a company is a person holding “a significant number of shares”, either directly or indirectly, or an individual with direct or indirect influence that, if exercised, would result in control in fact of a company.
A “significant number of shares” means (1) shares that carry 25% or more of the voting rights attached to all of a company’s outstanding voting shares; or (2) that represent 25% or more of all of the company’s outstanding shares as measured by fair market value.
Content of the Register
Currently, for each individual with significant control the ISC Register must include the following information:
- name, date of birth and latest known address;
- jurisdiction of residence for tax purposes;
- the day when the individual became, or ceased to be, an individual with significant control;
- description of how the individual has significant control over a company, including a description of any interests and rights they have in shares of the company;
- description of the steps taken by the company in each financial year to ensure the Register is complete and accurate;
- any other prescribed information required by regulation; and
- a description of the steps taken to determine the information in the ISC Register.
Bill C-42
On June 1, 2023, Bill C-42, An Act to Amend the Canada Business Corporations Act and to Make Consequential and Related Amendments to Other Acts received its second reading in Parliament. Bill C-42, if passed:
- would require the ISC Register to include the residential address, address for service (if any) and the citizenship of each beneficial owner.
- would require corporations to provide their ISC Register to Corporations Canada annually, and/or within 15 days of any changes to the ISC Register.
- would allow Corporations Canada to create a publicly accessible register of certain information contained in an ISC Register, including the names, address for service or residential address and the share ownership of each individual with significant control. The publicly accessible register is planned to include beneficial ownership information collected by the provinces and territories that choose to participate.
- would allow Corporations Canada to share information collected with the Canada Revenue Agency and other investigative bodies.
- would increase the penalties for non-compliance with beneficial ownership reporting rules to a fine of up to $200,000 and/or up to six months imprisonment.
If you would like our assistance in complying with your legislative requirements or preparing your Register, or if you have any questions about the proposed disclosure requirements or would like to be informed if these proposed changes are to be brought into effect, please contact us at compliance@stewartmckelvey.com.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact the author.
Click here to subscribe to Stewart McKelvey Thought Leadership.
Archive
In Wood v. Wood et al, 2013 PESC 11, a motion pursuant to Rule 7.08 of the Rules of Civil Procedure for court approval of a settlement involving a minor, Mr. Justice John K. Mitchell approved the settlement among the…
Read MoreClients who sit on boards of corporate employers should take note of recent amendments made to New Brunswick’s Employment Standards Act (the “ESA”) which could increase their exposure to personal liability in connection with claims advanced by…
Read MoreSignificant changes may be coming to the standard automobile policy in PEI, including increases to the accident benefits available under Section B and an increase to the so-called “cap” applicable to claims for minor personal…
Read MoreOn June 17, 2013, pursuant to the recently amended Section 70 of the Labour Relations Act for Newfoundland and Labrador (“NL”), the Government of Newfoundland and Labrador issued three Special Project Orders (“SPOs”) in respect of the…
Read MoreOn June 14, 2013, the Supreme Court of Canada (“the Court”) released the decision that employers across the country were waiting for. In CEP Local 30 v. Irving Pulp & Paper Ltd., 2013 SCC 34, a…
Read MoreThe Government of Newfoundland and Labrador (“NL”) has recently released its “Aboriginal Consultation Policy on Land and Resource Development Decisions” (the “Policy”). A copy of the Policy can be accessed here. This new Policy is the…
Read MoreThe following is a province-by-province update of legislation from a busy 2013 spring session in Atlantic Canada. Watching these developments, we know the new legislation that has passed or could soon pass, will impact our…
Read MoreThe integrity of the jury system has become a pressing topic for our courts of late, with articles about jury duty frequently appearing front and centre in the press. The recent message from the Nova…
Read MoreIN THIS ISSUE: Cloud computing: House to navigate risky skies by Daniela Bassan and Michelle Chai Growing a startup by Clarence Bennett, Twila Reid and Nicholas Russon Knowing the lay of the land – Aboriginal rights and land claims in Labrador by Colm St. Roch Seviour and Steve Scruton Download…
Read MoreDOES IT APPLY TO YOU? On June 1, 2013, the Personal Health Information Act (PHIA) comes into force in Nova Scotia. If you are involved in health care in Nova Scotia, you need to know whether PHIA…
Read More