Scott Park, CPA, CA
The federal government has implemented changes to the Canada Business Corporations Act (“CBCA”), which come into effect June 13, 2019 for federally incorporated companies. The CBCA sets out criterion for identifying individuals who have significant control over a corporation. It also sets out a requirement for corporations that meet certain criteria to keep a register of these individuals. The purpose of these beneficial ownership registers is to offer better corporate transparency to strengthen Canada’s anti-money laundering regime.
An individual may have significant control over a corporation if the individual has any of the following interests or rights, or any combination of them, in respect of a significant number of shares (more than 25% of voting rights or value) of the corporation:
A group of two or more individuals whose joint holdings meet these criteria are considered to be an individual with significant control.
Once those having significant control of a corporation are determined, the registry must include the following information for each of these individuals:
Adding to the burden, the registry needs to be reviewed and updated each fiscal year. If changes occur at other times in the year, the register must be updated accordingly within 15 days of the change.
Failure to comply with the requirements to maintain a registry may be subject to a $5,000 penalty. A director or corporation who “knowingly authorizes, permits or acquiesces” in not fulfilling this requirement or who provides false or misleading information in the registry may be subject to a fine of up to $200,000 and/or imprisonment of up to six months.
Tip: It is always recommended that a corporation retain a lawyer’s office to be the registered and records office in order to maintain the corporate annual report filings and records books as required under the federal CBCA or provincial laws.
Disclaimer: The blogs posted on Scott Park & Co Inc. website provide information of a general nature. These blog posts should not be considered specific advice since each person's personal financial situation is unique and fact specific. Please contact us prior to implementing or acting upon any of the information contained in one of our blogs. Scott Park & Co Inc. cannot accept any liability for the tax consequences that may result from acting based on the information contained therein.
C A T E G O R I E S
P O P U L A R P O S T S