Federal Corporations to Begin Tracking Individuals with “Significant Control”
A law which received Royal Assent December 13, 2018 will increase reporting obligations of corporations governed by the Canada Business Corporations Act (or CBCA).
Effective June 13, 2019, non-public CBCA corporations will be responsible for maintaining a register of “individuals with significant control over the corporation”. This register will be available to shareholders and creditors of the corporation and their representatives upon request.
The register will list individuals who hold or have control over shares that represent either 25% of the total votes or 25% of the total value of the corporation’s shares, as well as individuals who have significant influence over the corporation through other means (amounting to “control in fact”).
CBCA corporations will have to collect information from their shareholders at least annually for the purposes of compiling this register, and will have to update the register continually with new information received from shareholders throughout the year.
The register will contain various details about these individuals with significant control: their name, date of birth, country of residence for tax purposes, latest known address, date on which became (and/or ceased to be) an individual with significant control, and a description of the nature of the control they have over the corporation.
Individuals are taken off the register six years after they cease to be an individual with significant control.
If you have a CBCA corporation and have questions about the new rules, please contact us.