Beneficial ownership, corporate transparency and other updates affecting Newfoundland and Labrador corporations
Sarah Byrne and Tauna Staniland, QC
On November 16, 2021, the Government of Newfoundland and Labrador proclaimed into force Bill 24, which amends the Corporations Act, RSNL 1990, c C-36 (the “Act”). The amendments remove the residency requirements for directors and increase the transparency of beneficial ownership of corporations by placing additional record keeping requirements upon privately held Newfoundland and Labrador corporations.
With respect to the amendments to increase transparency of beneficial ownership, all corporations formed under the Act, aside from public corporations, are now required to maintain a register of individuals with significant control (“ISC Register”) which must be updated at least annually.
An “individual with significant control” over a corporation includes individuals who:
- directly or indirectly hold or control a significant number of shares; or
- have direct or indirect control or direction over a significant number of shares of the corporation, that, if exercised, would result in control in fact of the corporation.
Under the Act, a “significant number of shares” means (1) shares that carry 25% or more of the voting rights attached to all of the corporation’s outstanding voting shares; or (2) shares that represent 25% or more of all of the corporation’s outstanding shares as measured by fair market value.
The register must contain the following information about every individual with significant control:
- full name, date of birth and last known address;
- the jurisdiction of residence for tax purposes;
- the day they became, or ceased to be, an individual with significant control;
- a description of how each individual has significant control over the corporation;
- a description of each step taken to ensure the information is accurate; and
- any other prescribed information.
At least once during each financial year, a corporation must take reasonable steps to ensure that it has identified all individuals with significant control, and ensure that the information in the register is accurate, complete and up to date.
Non-compliance can result in fines of up to $200,000, imprisonment up to six months, or both, for directors, officers or shareholders. Corporations may be fined up to $5,000 for failing to maintain a register or for failing to comply with a request for information from an investigative body.
If you would like our assistance in complying with these legislative changes and preparing your ISC Register, or if you have any questions about the new disclosure requirements, please contact us at email@example.com. If you do not respond to this communication we will assume that you are handling compliance internally.
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 a member of our Corporate Formation/Reorganization group.
Click here to subscribe to Stewart McKelvey Thought Leadership.
By Kevin Landry and Jahvon Delaney Background On March 25, 2023, the Government of Canada released a Notice of Intent titled Consultation on potential amendments to the Cannabis Regulations. The Notice outlines that Health Canada is…Read More
By Kimberly Bungay On April 1, 2023, the Nova Scotia government will proclaim into force Bill 226, which amends the Companies Act (the “Act”) to require companies formed under the Act to create and maintain…Read More
Abuse of sick leave / failure of employee to participate in accommodation process: Vail v. Oromocto (Town), 2022 CanLII 129486
By Chad Sullivan and Kathleen Starke Background A recent decision, Vail v. Oromocto (Town), 2022 CanLII 129486, involved several grievances including an unjust dismissal claim by a firefighter as well as a grievance filed by…Read More
By Stuart Wallace and Kim Walsh On January 1, 2022, the Underused Housing Tax Act (the Act) took effect. The Underused Housing Tax (the UHT) is an annual 1% tax on the value of vacant or…Read More
Parlez-Vous Francais? Recent amendments to Quebec’s Charter of the French Language may impact Atlantic Canadian businesses
By: David F. Slipp and Levi Parsche In May 2022, Bill 96 was adopted by Quebec’s National Assembly, significantly amending the Charter of the French Language (the “Charter“). The amendments create new requirements for using…Read More
The Winds of Change (Part 7): Paying the Piper: New Newfoundland and Labrador Fiscal Framework expects billions in revenues from wind to hydrogen projects
By Dave Randell, G. John Samms, and Stuart Wallace With the deadline for bids on crown lands available for wind energy projects extended to noon on March 23rd, the latest development in our Winds of…Read More
By Kevin Landry and Colton Smith The Retail Payment Activities Regulations have been released in the Canada Gazette Part 1 for comment. Interested persons may make representations concerning the proposed regulations for a period of 45…Read More
By Andrew Burke, Colleen Keyes, Gavin Stuttard and David Slipp With proxy season once again approaching, many public companies are in the midst of preparing their annual disclosure documents and shareholder materials for their annual…Read More
By Brittany Trafford and Sean Corscadden In response to the nationwide labour shortage, the Federal government is allowing select family members of foreign workers to apply for open work permits. This temporary policy came into…Read More
Mark Tector and Ben Currie Effective January 1, 2023, amendments to Ontario’s Employment Standards Act, 2000 (“ESA”) took effect, excluding “business consultants” and “information technology consultants” from the application of the ESA. This is a…Read More