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 compliance@stewartmckelvey.com.
Click here to subscribe to Stewart McKelvey Thought Leadership.
Archive
As many of you will now know, the Nova Scotia Government introduced legislation on Friday, December 6, 2013, amending provisions of the Nova Scotia Trade Union Act dealing with First Contract Arbitration. This client update sets out…
Read MoreIn a decision that will largely be of interest to international organizations that have been granted some type of immunity in Canada, the Supreme Court of Canada (SCC) has confirmed that international organizations enjoy immunity…
Read MoreThe Prince Edward Island (“PEI”) legislature has proposed changes to the PEI Human Rights Act to add “gender expression” and “gender identity” as new protected grounds of discrimination. First introduced on November 13, 2013 the…
Read MoreWe previously circulated a client update regarding contemplated changes to automobile insurance in Prince Edward Island. Government has now published a consultation paper (www.gov.pe.ca/photos/original/eljautoinreform.pdf), seeking responses in writing on or before December 2, 2013. According to the consultation…
Read MoreThe Association of Caribbean Corporate Counsel (ACCC) released the inaugural edition of its quarterly journal, Caribbean Corporate Counsel, featuring CEO, John Rogers, Q.C., advisor on the International Advisory Board, and an article by partner Paul Smith, entitled “Governance…
Read MoreCHANGES, CHANGES AND MORE CHANGES: KEEPING UP WITH THE TEMPORARY FOREIGN WORKER PROGRAM These days, Canada’s Temporary Foreign Worker Program (“TFWP”) is more top of mind than ever for Canadian employers. This is in part…
Read MoreBy October 17, 2014 existing not-for-profit corporations incorporated under Part II of the Canada Corporations Act (the “Old Act”) are required to be continued under the new Canada Not-for-Profit Corporations Act (the “New Act”) or face the possibility of automatic administrative…
Read MoreIN THIS ISSUE: Reasonable Cause: A necessary prerequisite for random alcohol testing policies by Mark Tector, Steve Carpenter, CHRP, Melissa Everett Withers, Ruth Trask Business Succession: Why is it critical? by Richard Niedermayer, TEP Privacy Please: Nova Scotia brings in new…
Read MoreOn May 19, 2011, Nova Scotia’s Labour Standards Code was amended to protect foreign workers from exploitation by recruiters and employers. These amendments imposed a requirement for third-party recruiters to obtain a license from the Province to…
Read MoreFacts This appeal arose from a decision which held that the Dominion of Canada General Insurance Company (“Dominion”) has a duty to defend Larry and Lona Hannam and their teenage son Jordan in an action…
Read More