The corporate beneficial ownership registry in Canada focuses on promoting transparency in the ownership structure of a corporation. The registry aims to identify the owners of a corporation with significant control.
Private corporations may have few shareholders with controlling interests. Without access to shareholder data in a corporation, it may be challenging to identify the beneficial ownership structure, especially in cases involving money laundering, conflict of interest, and fraud.
The Federal Corporate Beneficial Ownership Registry
The Federal corporate beneficial ownership registry provides access to significant control information for corporations governed by the Canada Business Corporations Act (CBCA). The Act requires most federally incorporated businesses to submit annual beneficial ownership information to Corporations Canada. In turn, Corporations Canada can provide the information to investigative bodies and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The Canadian government, through the Canada Revenue Agency (CRA), can also share data with Corporations Canada to verify the information corporations have provided.
Beginning on January 22, 2024, if you have a federally incorporated business, you will be required to provide information on individuals with significant control (ISC). The Bill C-42 Act amendment to the Canada Business Corporations Act, which received royal assent on November 2, 2023, will mean that the public can access some of the filed information with Corporations Canada.
It is essential to let your corporation’s individuals with significant control (ISC), primarily those who own the majority of the controlling share and direct the corporation’s operations, know that some or all of their filed information may become available to the public. A general rule of thumb is that anyone who can influence the corporation’s operations, economics, and daily management has significant control.
The type of information that the public may access includes:
- Full legal name
- Date the individual became an ISC and ceased to be an ISC, as applicable
- Description of the ISC’s significant control
- Residential address, if no address for service is provided
- Address for service, if provided
The type of Information the public will not have access to includes:
- Date of birth
- Country (or countries) of citizenship
- Country (or countries) where the ISC is considered a resident for tax purposes
- Residential address (if an address for service is provided)
When to File the Federal Individuals with Significant Control
Your federally incorporated business is required to file ISC information with Corporations Canada at the following times:
- When filing your annual return
- Within 15 days of being aware or making any changes to your ISC register
- When incorporating your business
- Within 30 days of the date on your Certificate of Amalgamation, where applicable. This occurs when your corporation merges with another to operate as one corporation.
- Within 30 days of your Certificate of continuance (import) date to a federal jurisdiction, where applicable.
You can file the Federal individuals with significant control online by visiting the Online Filing Centre and selecting to file an annual return, incorporate, or View/change information on individuals with significant control, depending on the situation.
Exceptions to Filing Federal Corporate Beneficial Ownership
Some corporations may be excluded from filing individuals with significant control information because the relevant securities laws already have this information or corporations where the Canadian government is the sole owner. Examples of such corporations include:
- A reporting issuer under provincial securities law or a wholly-owned subsidiary of such a corporation
- A public corporation that trades its securities on a stock exchange designated by the Income Tax Act or a wholly-owned subsidiary of such a corporation
- A Crown corporation or a wholly-owned subsidiary of such a corporation
The British Columbia Transparency Registry
The British Columbia (B.C.) government requires provincial-incorporated businesses to provide information on individuals with significant control. Starting on October 1, 2020, private corporations in B.C. are required to maintain a transparency register of beneficial owners, which shows all individuals with direct or indirect control of the company.
In alliance with the Federal government to increase transparency and combat illegal corporate activities, such as money laundering, the B.C. government, through the Business Corporations Act, requires private companies in British Columbia to list their significant individuals with control in a transparency register.
Corporations must also completely eliminate pre-existing bearer share certificates in B.C. companies to provide transparency on individuals who own and control private companies. A bearer share certificate exists when the share certificates do not specify a name as the owner of the shares. To eliminate bearer shares, the bearer shareholder must exchange the bearer shares for registered shares before exercising any attached shareholder rights. A registered shareholder certificate will state the name of the shareholder.
Who Can Access the British Columbia Corporate Owner Registry?
The public cannot access the B.C. transparency register. The only individuals or organizations with access to the British Columbia corporate ownership registry are the company’s current directors, law enforcement agencies, and some inspecting officials, where applicable.
Your corporation is required to grant access to the transparency register to Law enforcement agencies and officials, including the B.C. Police Force, the Royal Canadian Mounted Police(RCMP), the B.C Tax Authority, the Canada Revenue Agency, the British Columbia Securities Commission, the B.C. Financial Services Authority (formerly FICOM), the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and the Law Society of British Columbia. You should verify the identities of any officials requesting access to the transparency register, as it contains confidential information.
Companies must identify individuals with significant control, notify them, and request their information for the transparency register. The significant individual’s information included in the register comprises:
- Their full name, date of birth, and last known address
- Their residency status in Canada as citizens or permanent residents
- Their citizenship status in any other country or state
- Their resident status in Canada for Income Tax purposes
- The date they became or ceased to be a significant individual
- A description of how they are a significant individual
Corporations are responsible for maintaining and keeping their transparency registers up-to-date. The transparency registers must be updated within 30 days of new or changes to current information.
Suppose your company cannot obtain information from shareholders to update your transparency register. In that case, you must justify this by showing all reasonable efforts put into gathering the required information from individuals with significant control.
Which Companies are Excluded From The B.C. Transparency Register?
If your corporation is not governed by the B.C. Business Corporations Act, you are not required to maintain a transparency register. Examples of such corporations are B.C. societies and cooperatives. Also, if you have an extra-provincial company incorporated in a different province but registered in British Columbia, your company will be excluded from the B.C transparency register.
Other legal entities excluded from the B.C. transparency register include publicly listed companies, trust and insurance companies, government corporations, indigenous nations companies, independent school companies, and companies under the School Act.
Contact the DW & Associates Chartered Professional Accountants for annual corporate tax and transparency register filings.
