New reporting requirements for beneficial ownership of Nova Scotia companies
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 a register of individuals with significant control over the company.
We want to ensure that you are aware of these new requirements for Nova Scotia companies, and have the opportunity to comply with them. Non-compliance can result in significant fines for a company, its shareholders, directors and officers, or potential imprisonment, for shareholders, directors and other relevant persons.
All companies formed under the Act, aside from public corporations, will be required to maintain a register of individuals with significant control (the “Register”).
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.
Under the amendments, 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
For each individual with significant control the Register must include the following information:
- name, date of birth and last 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; and
- any other prescribed information required by regulation.
At least once in each of its financial years, the company 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 days.
Compliance and penalties
Companies 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. Directors and officers can be fined up to $200,000 or imprisoned for up to six months for failing to maintain the Register, failing to respond to a request from an investigative body or allowing false or misleading information to be recorded in the Register. Shareholders will also face imprisonment for up to six months and fines of up to $200,000 for failure to meet their obligations to provide information for the Register.
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 us at email@example.com.
Click here to subscribe to Stewart McKelvey Thought Leadership.
By Conor O’Neil and Maria Cummings On May 9, 2023, two bills were introduced in the New Brunswick Legislature that could have material affects on the construction industry. Bills 41 and 42, of the current…Read More
Author Sara Espinal Henao, an Immigration Lawyer in our Halifax office, will be speaking on a related panel, Labour Market Impact Assessments Overview and Current Trends, at the upcoming CBA Immigration Law Conference in Ottawa,…Read More
Author Brendan Sheridan, an Immigration Lawyer in our Halifax Office, will be running a related webinar on May 30, 2023, Avoiding immigration bloopers: A webinar for the film & television industry, in partnership with Screen…Read More
Whose information is it anyway? Implications of the York University decision on public and private sector privacy and confidentiality
Included in Discovery: Atlantic Education & the Law – Issue 12 By Charlotte Henderson Privacy and confidentiality requirements are some of the most important responsibilities of organizations today. An organization’s ability to properly manage information,…Read More
Included in Discovery: Atlantic Education & the Law – Issue 12 By Hilary Newman & Jacob Zelman A non-disclosure agreement, or “NDA”, is a legal contract in which two or more persons agree to keep the…Read More
By Graham Haynes & Isaac McLellan Introduction The Canadian federal budget was unveiled on Tuesday, March 28, 2023 (“Budget 2023”)1 , and proposes significant changes to the General Anti-Avoidance Rule (the “GAAR”) in Canadian tax…Read More
When closed doors make sense: Court dismisses challenge to university board’s procedure for in camera discussions
Included in Discovery: Atlantic Education & the Law – Issue 12 By Scott Campbell, Jennifer Taylor, Folu Adesanya A long-standing dispute over governance practices at the Cape Breton University Board of Governors was recently resolved…Read More
Included in Discovery: Atlantic Education & the Law – Issue 12 By Jon O’Kane & Emma Douglas These days it seems no one is immune from the threat of anonymous keyboard warriors posting untrue and…Read More
Included in Discovery: Atlantic Education & the Law – Issue 12 By Dante Manna Once known for recreational use, psychedelics are slowly gaining medical legitimacy as research emerges on possible therapeutic benefits for mental health…Read More
We are pleased to present the twelfth issue of Discovery, Stewart McKelvey’s legal publication targeted to educational institutions in Atlantic Canada. Our lawyers provide insight on a number of topics facing universities and colleges including…Read More