On December 13, 2018, Bill C-86, the Budget Implementation Act, 2018 No. 2, received Royal Assent. This bill brings significant changes to the Canada Business Corporations Act (CBCA) requiring corporations to keep a detailed register of information about individuals who have significant control of the corporation. These changes come into effect on June 13, 2019.

Currently, federal non-distributing corporations (“private companies”) must maintain a central securities register to record:

  • the names and addresses of each person who is or has been a security holder of the corporation
  • the number of securities held by each security holder
  • the date and particulars of the issue and transfer of each security.

Following the changes in Bill C-86, private companies must identify individuals with “significant control” over the corporation.  Individuals with “significant control” are defined as:

  • The registered or beneficial owner of, or has direct or indirect control or direction over shares that carry 25% or more of the voting rights or is equal to 25% or more of the corporation’s outstanding shares.
  • A person who has any direct or indirect influence that, if exercised, would result in control in the fact of the corporation

To determine individuals with “significant control” each federal non-distributing corporation will be required to maintain the New Register, which contains the following for each relevant individual:

  • name, date of birth and last known address
  • jurisdiction of residence for tax purposes
  • date on which the individuals became or ceased to be individuals with “significant control”
  • description of how the individuals qualify as individuals with “significant control”
  • steps taken to identify all individuals with “significant control”
  • other information to be outlined in upcoming regulations

Penalties for non-compliance upon conviction of an offence include a fine not exceeding $200,000 or imprisonment for a term not exceeding six months, or both. If you have any questions about Bill C-86 or your company’s requirements, reach out to your Account Manager at Bateman MacKay.