New corporate registration requirements
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:
- their name, date of birth, and latest address;
- jurisdiction of residence for tax purposes;
- the day when they became or ceased to be an ISC;
- a description of how they have significant control; and
- any other “prescribed information” (no regulations to define, as yet).
- 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.