Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

New Requirements for Private Federal Corporations to Report Individuals with Significant Control Coming Soon

New Requirements for Private Federal Corporations to Report Individuals with Significant Control Coming Soon

By:

Posted November 14, 2022

Private corporations governed under the Canada Business Corporations Act (“CBCA”) will soon be required to report certain information about individuals with significant control directly to Corporations Canada.

Current Regime

In an effort to increase transparency around beneficial ownership of corporations and to curb illegal activities such as money laundering, tax evasion, and terrorist financing, it became mandatory, as of June 2019, for all private corporations governed by the CBCA to create and maintain a register (the “ISC Register”) for any individuals with significant control over the corporation. Specifically, the ISC Register must list any individual who has: (a) a registered or beneficial ownership of at least 25% of all of the corporation’s shares or voting shares; (b) direct or indirect control of at least 25% of all of the corporation’s shares or voting shares; (c) direct or indirect de facto control over the corporation; or (d) any combination of the foregoing that cumulatively gives that individual significant control over the corporation. An individual can also be an individual with significant control if the individual owns or controls a significant number of shares with one or more individuals jointly.

Such corporation’s ISC Register, which must be kept at its registered office or at any other place in Canada, must contain the following information:

  • the name, date of birth, and last known address of each individual with significant control;
  • the jurisdiction of residence (country or countries) for tax purposes of each individual with significant control;
  • the date on which each individual with significant control acquired significant ownership or control and, if applicable, ceased to have significant ownership or control;
  • a description of how such individual meets the definition of an individual with significant control; and
  • a description of steps taken by the corporation to identify individuals with significant control and to update such information.

Currently, the ISC Register must be provided, upon request, to Corporations Canada, police, Canada Revenue Agency and any similar provincial bodies, other prescribed investigative bodies, as well as the shareholders and creditors (or their personal representatives) of the corporation under certain conditions.

Additional Requirements Coming

On June 23, 2022, the federal Budget Implementation Act, 2022, No. 1, received royal assent. This Act will amend the CBCA to, among other things:

  1. Require each private CBCA corporation to submit to Corporations Canada the information included in its ISC Register: (a) after the issuance of certificates of incorporation, amalgamation, and/or continuance under the CBCA; (b) on an annual basis; and (c) within 15 days of any change in the information submitted; and
  2. Allow Corporations Canada to provide all or part of that information to an investigative body, the Financial Transactions and Reports Analysis Centre of Canada, or any prescribed entity.

These amendments are not yet in force and will come into force on a day to be fixed by order of the Governor in Council. It remains unclear how these changes will be implemented and how corporations will need to submit their reports.

Earlier this year, the federal Department of Finance has indicated that these changes are the first steps towards implementing a publicly-accessible beneficial ownership registry of corporations incorporated federally.

To learn more about ISC Registers, please click here.

This blog post was written by Marina Abrosimov, a member of the Business Law team.  Marina can be reached at 613-369-0363 or at marina.abrosimov@mannlawyers.com.

More Resources

Blog |
Business Law
By: 

Posted June 18, 2024

This is an update on my earlier blog posted in 2022 titled “New Requirements for Private Federal Corporations to Report Individuals with Significant Control Coming[...]
Blog |
Estate Litigation
By: 

Posted June 11, 2024

“For it is in giving that we receive.” –Francis of Assisi Many of us grew up hearing this mantra. Good people give back. Generous people[...]
Blog |
Real Estate
By: 
What is title? “Title” is a legal term for a person or company’s rights of ownership in a private property. This is different from a[...]
Blog |
Wills, Trusts and Estates, Business Law, Real Estate
By: 

Posted May 28, 2024

The recent announcement from the Federal Government regarding an increase in the capital gains inclusion rate for individuals, trusts, and corporations has sparked significant discussion.[...]
Blog |
Family Law
By: 
When couples part ways, the shared ownership of a matrimonial home often becomes a contentious issue. In Ontario, the law recognizes two forms of co-ownership:[...]
Blog |
Real Estate
By: 
If you are purchasing a home in Ontario, you likely know that you should retain a real estate lawyer to close the transaction for you.[...]
Marina Abrosimov

Marina Abrosimov

As a corporate and commercial lawyer, I provide clients with a wide range of services, including assisting in acquisition and sale of businesses, commercial leasing, business formation and governance, as well as drafting and reviewing a variety of commercial contracts. In addition, I advise both franchisees and franchisors on franchise agreements and disclosure requirements. I graduated from the University of Toronto in 2006 with a Bachelor of Science (with high distinction), completing a research specialist program in psychology. I obtained my Juris Doctor degree from the University of Toronto in 2009 and was called to the Bar the following year. Prior to joining Mann Lawyers in 2019, I practiced as a corporate and commercial lawyer in a mid-size Ottawa law firm. I am a member of the Canadian Bar Association, the Ontario Bar Association, and the County of Carleton Law Association. Born in Russia and raised in Israel and Canada,... Read More

Read More About Marina Abrosimov

Subscribe to Our Newsletter

"*" indicates required fields

Name*
Consent*
This field is for validation purposes and should be left unchanged.