Bill 69, Tax Fairness for Realtors Act, 2015 was introduced and was carried after its first reading in the Ontario Legislative Assembly in Feb 2015. If passed, Bill 69 will amend both the Real Estate and Business Brokers Act, 2002 (the “REBA”) and the Business Corporations Act (Ontario) (the “OBCA”) by allowing for the incorporation of “personal real estate corporations” that can act as salespersons and brokers in accordance with the requirements set by REBA and the Real Estate Council of Ontario.
If Bill 69 becomes law, REBA will be amended as follows:
- The definitions of “broker” and “salesperson” will be broadened to include personal real estate corporations where the owner of the equity (common) shares must have the qualifications to be registered as a broker under REBA and the corporation must be employed by a brokerage to trade in real estate;
- Limits will be placed on the structure and operation of “personal real estate corporations”, which include the following:
- All equity (common) shares must be held by individual persons how are qualified to be registered as brokers;
- Shares cannot be held by corporations;
- All non-equity (preference) shares must be held either by the individual who holds the common shares or by individuals in their immediate family;The corporation’s name must include “personal real estate corporation” or its French equivalent; and,
- The corporation can only carry on the profession of trading real estate.
- These corporations must meet the qualifications of “professional corporations” as set forth in the OBCA.
Accordingly, these changes will affect the OBCA which will be amended accordingly. The following OBCA conditions will apply to professional real estate corporations:
- All officers and directors must be shareholders in the corporation;
- The corporation cannot use a number name; and,
- The articles must specifically set out the restrictions on what business the corporation can provide – e.g., solely trading in real estate.
We will follow Bill 69 as it works its way through the legislature and if it becomes law, we are ready to assist realtors with incorporation and ensuring they meet all of the legislated requirements.