Amendments to the Canada Business Corporations Act affecting registers of individuals with significant control
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.
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 firstname.lastname@example.org.
Click here to subscribe to Stewart McKelvey Thought Leadership.
By Nancy Rubin, K.C. and Lauren Agnew The long-awaited Green Choice Program Regulations (N.S. Reg. 155/2023) were released by the provincial government on September 8, 2023, offering some clarity into the practical implementation of Nova…Read More
By Koren Thomson, John Samms, and Matthew Raske The Newfoundland and Labrador Court of Appeal has held that the Information and Privacy Commissioner for this province (the “Commissioner”) does not have the authority to order…Read More
By Perlene Morrison, K.C. Municipalities are required to pass code of conduct bylaws in accordance with section 107 of the Municipal Government Act (the “MGA”). Subsection 107(1) of the MGA specifically states that a municipality’s…Read More
By Sheila Mecking and Kathleen Starke On August 23, 2023, the Ontario Superior Court (“ONSC”) upheld a complaints decision which ordered a psychologist to complete a continuing education or remedial program regarding professionalism in public…Read More
By Dante Manna As we advised in a previous podcast, all federal employers with at least ten employees have been subject to the Pay Equity Act  (“PEA”) and Pay Equity Regulations  (“Regulations”) since…Read More
By Nancy Rubin, K.C. Environment and Climate Change Canada (ECCC) recently published a draft of the Clean Electricity Regulations (CER). The proposed Regulations work toward achieving a net-zero electricity-generating sector, helping Canada become a net-zero…Read More
By Stephen Penney & Matthew Raske In the recent decision Index Investment Inc. v. Paradise (Town), 2023 NLSC 112, the Supreme Court of Newfoundland and Labrador validated the Town of Paradise’s decision to rezone lands…Read More
By Sara Espinal Henao Immigration, Refugees and Citizenship Canada (“IRCC”) has announced a promising new temporary measure that allows foreign workers to study for a longer duration without a study permit, opening the door for…Read More
By Brendan Sheridan The Government of Canada recently announced a number of aggressive immigration measures to help attract top talent to Canada in high-growth industries in an effort to fuel innovation and drive emerging technologies.…Read More
By Daniela Bassan, K.C. All stakeholders in the legal profession, including litigators, have a shared interest in promoting environmental, social, and governance (ESG) pathways towards building a greener society. It is crucial for litigators to…Read More