Effective October 1, 2020, amendments to the Business Corporations Act (“BCBCA”) (through Bill 24) will require private BC companies to keep and maintain a transparency register (“Register”) which requires detailed information on all “significant individuals” (see summary below).  The BCBCA amendments and Register will increase transparency of corporate ownership in an effort to tackle tax evasion, money laundering, and the like,  as law enforcement, tax authorities and regulators will able to access the Register.

See this link for full details: https://www2.gov.bc.ca/gov/content/employment-business/business/bc-companies/bearer-share-certificate-transparency-register

If you require advice or assistance for your company with respect to this new Registry requirement, please let us know and we can certainly assist you.

Questions and Answers regarding the Transparency Register:

Q: What persons or entities are listed on the Transparency Register?

A: The Register lists information on “significant individuals” which is defined as someone having (summarized):

1. an interest or right, or a combination of them, in a significant number of shares  (25% or more of the issued shares of the company, or 25% or more of the voting rights of the company, and note that an individual must be listed as a significant individual if they indirectly control an intermediate entity or a person that holds 25% or more of the shares or votes of a private company);
2. the right or ability, or combination of them, to elect, appoint or remove a majority of the directors of the company (through shareholder rights and/or by way of the articles of the company);
3. interests or rights held jointly; or
4. interests, rights or abilities exercised in concert under an agreement.

Q: What information is required on the Register for significant individuals?

A: Information collected and required for the Register includes (for significant individuals):

1. Full name, date of birth and last known address.
2. Confirmation whether they are a Canadian citizen or permanent resident of Canada.
3. If they are not a Canadian citizen or permanent resident of Canada, every country or state of which they are a citizen.
4. If they are a resident in Canada for the purposes of the Income Tax Act (Canada).
5. The date when they became or ceased to be a significant individual in the company.
6. A description of how they are a significant individual.

Q: Is all the information collected and on the Register then accessible by the public?

A: No. The public will not have any access to the Register. Only current directors of the company and its records office, law enforcement, tax authorities and regulators can view the transparency register between 9 am to 4 pm Monday through Friday (unless it is a holiday). It is possible to further restrict the inspection time in the company’s articles, but it must be open for inspection for at least two consecutive hours each day Monday through Friday (unless it is a holiday). Officials that can inspect the Register are:

• Police force in BC
• The Royal Canadian Mounted Police
• Tax authority of BC
• The Canada Revenue Agency
• The British Columbia Securities Commission
• The BC Financial Services Authority (formerly FICOM)
• The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and
• The Law Society of British Columbia

Q: Is the Register required for Public companies or companies that are Extra-provincially registered in BC?

A: No. The Register is specific only to private companies incorporated in BC.

Q: Is a BC company required to maintain and keep up-to-date their Register?

A: Yes. Companies must make updates to their transparency register within 30 days of receiving new or different information. Companies that are unable to obtain or confirm information from shareholders (for set-up and/or updating) must record all reasonable steps and efforts taken to gather the required information.

Q: What happens if companies or shareholders do not comply with the Register requirements under the BCBCA?

A: Fines could be levied up to $50,000 per director/officer or up to $100,000 for companies if a company provides false or misleading information or fails to disclose significant individuals and their information required. Shareholders could also be fined up to $50,000 per individual and up to $100,000 for companies if they fail to send the company the information requested which is required for the Register.

Q: How does my company create a Register and where is it held?

A: Law firms such as JarvisLegal which hold and maintain corporate records for BC private companies can: (1) provide questionnaires companies can use for their shareholders and for those that they determine or know fall under the definition of “significant individual”; and (2) then prepare and maintain the Register in accordance with their records office agreement with the company.

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