Beneficial Ownership Registry Rules Come to New Brunswick
By Alanna Waberski, Graham Haynes and Maria Cummings
On June 10, 2022, the Government of New Brunswick proclaimed into force Bill 95, which amends the Business Corporations Act (New Brunswick) (the “NBBCA”) to require corporations to maintain a register of all individuals with significant control over the corporation, among other things.
Non-compliance can result in significant fines for a corporation, its shareholders and other individuals.
1. Register Maintenance
Under Bill 95, all corporations formed under the NBBCA, aside from public corporations, are required to maintain a register of individuals with significant control (a “Register”). An “individual with significant control” over a corporation is defined as an individual who:
- is the registered holder of a “significant number of shares”;
- is the beneficial owner of a “significant number of shares”; or
- has direct or indirect control over a “significant number of shares”.
A “significant number of shares” is defined as either any number of shares that carry 25% or more of the voting rights attached to all of the corporation’s outstanding voting shares, or any number of shares that is equal to 25% or more of all of the corporation’s outstanding voting shares.
A register must contain the following information about every individual with significant control:
- their full name, date of birth and last known address;
- their 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, including their interests and rights in respect of shares of 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, and must also update any information which has changed once it becomes aware of such change within fifteen (15) days.
A corporation that, without reasonable cause, fails to maintain a Register or fails to comply with a request for information from an investigative body may be fined up to $10,200 for a first offence or, for a second or further offence, be fined up to $15,000 or such face imprisonment for up to 90 days. A judge may also choose to levy a fine in an amount above the aforementioned maximums in certain circumstances. Shareholders that fail to comply with requests for information from a corporation can also be subject to the same penalties for not complying.
3. Bearer Share Warrant Prohibition
Also under Bill 95, corporations are prohibited from issuing bearer share warrants (i.e., shares granting ownership to the person who physically possesses the bearer share warrant certificate) following the date of enactment.
If you would like our assistance in complying with these legislative changes and preparing your Register, or if you have any questions about the new disclosure requirements, please contact our Firm at firstname.lastname@example.org.
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