As of June of 2019, federal private corporations will be required to maintain a registry of “Individuals with Significant Control” (ISC) in addition to an annual obligation to take reasonable steps to ensure their register is complete and up-to-date.

Corporations will have an obligation to update their registry within 15 days of becoming aware of a change. ISCs are individuals who are registered or beneficial owners with direct or indirect control over a significant number of shares or voting rights, individually or jointly with another person(s). The register must disclose:

  1. their name, date of birth, and latest address;
  2. jurisdiction of residence for tax purposes;
  3. the day when they became or ceased to be an ISC;
  4. a description of how they have significant control; and
  5. any other “prescribed information” (no regulations to define, as yet).
  6. description of efforts undertaken to confirm accuracy of the information

The register is not available to the public, but it is open to shareholders, creditors and the Canadian government. Non-compliance could result in a director, officer or shareholder being fined up to $200,000, six months imprisonment, or both.

The federal government is the first to enact the requirement in Bill C-86, Division 6 (Royal Assent received on December 13, 2018) however, provincial governments have also agreed to the provisions. Be on the lookout for provincial regulations.

Categories: Corporate Law