Corporations Canada - Nouvelles normes

Corporations Canada

New standards for federally regulated companies

 

As of January 22, 2024, federally incorporated corporations under the Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the “CBCA”) will be required to file with Corporations Canada (online) information regarding individuals with significant control (“ISC”) to comply with new reporting standards.

Thus, for the purposes of the CBCA, an ISC is an individual who owns or controls a corporation. In practice, if the individual answers “yes” to any of the following statements, they are one of your corporation's ISCs:

  • Are you an individual who owns, controls or manages 25% or more of the voting or participating shares, individually, jointly or in concert with one or more persons in your corporation?
  • Are you an individual who does not own shares in your corporation, but you exercise de facto control over it? or
  • Do you meet any combination of these criteria?

In addition, it should be noted that the new obligations imposed by Corporations Canada for federal corporations seem to be in line with those imposed by the Registraire des entreprises in Quebec, which since March 31, 2023, has required corporations to declare their ultimate beneficiaries, a concept that seems to be similar to that of the ISC. Thus, it would seem that the aim of these new requirements at both Quebec and federal levels is to demonstrate greater transparency by giving greater visibility over who are the individuals behind each corporation.

The obligation to comply with new standards

As of January 22, 2024, all companies incorporated under the CBCA will be required to transmit ISC information to Corporations Canada. It will also be mandatory for these companies to keep an ISCs register in their corporate documents (ex.: the corporation minute book), and to keep it up to date.

However, the following companies are not required to comply with the new requirements:

  1. A reporting issuer under provincial securities legislation or a wholly owned subsidiary of such a corporation;
  2. A public company that trades its securities on a stock exchange designated under the Income Tax Act, or a wholly owned subsidiary of such a corporation;
  3. A government company or a wholly owned subsidiary of such a corporation.

Information affected by the new standards

Under a bill currently before the Canadian Parliament, certain information could be made public when the new requirements come into force:

  1. Full legal name of the ISCs;
  2. The date on which the individual became and ceased to be an ISC, as applicable;
  3. Description of the ISC's significant control;
  4. The ISC's residential address (this would be made public if no address for services is provided);
  5. ISC's address for services (if one is provided).

However, under this bill, the disclosure of information shall not apply to the following:

  1. The date of birth of the ISC;
  2. ISC's country or countries of citizenship;
  3. Country or countries where the ISC is considered a resident for tax purposes;
  4. The ISC's residential address (if an address for services is provided).

In these circumstances, it is important to inform your corporation's ISCs that some of their information may become public.

Procedure for transmitting new information

Your corporation's ISCs information can be submitted online to Corporations Canada by one of the following means, depending on your corporation's situation:

  1. When your corporation is incorporated;
  2. When you file your annual report;
  3. Within fifteen (15) days of any change in your ISCs register;
  4. Following a merger; or
  5. Following a continuance of your corporation under federal jurisdiction.

What do you have to do between now and January 22, 2024?

As mentioned above, this information may be reported to Corporations Canada as of January 22, 2024. It is therefore important to identify your corporation's ISCs now, and to collect the relevant information related to them, as detailed above.

In the event that your corporate minute book is hosted at Hub6, we will contact you at your next reporting period (annual report) to obtain the necessary documents/information, and one of our legal team members will take care of the filing. If not, we invite you to contact one of our legal team members if you would like assistance with this new process.

In the meantime, if you need assistance in determining your corporation's ISCs, or have any other questions regarding these new requirements, please don't hesitate to contact us.