Rules in British Columbia that largely mirror the federal corporate “significant control” reporting requirements will be effective 1 May 2020.
Certain private corporations in British Columbia will be required to maintain up-to-date records reporting details about “significant individuals” (that is, individuals who meet the legislated corporate ownership thresholds).
These rules were originally included in a provincial bill that received Royal Assent in May 2019. However, the effective date for the new rules was set by British Columbia's Order in Council No. 533, dated 24 October 2019. The order also added additional regulations to the rules which include certain relevant definitions for certain terms including “control,” “indirect control,” and “chain of intermediaries.”
The federal “significant control” reporting requirements were enacted in 2018. Under this change (effective 13 June 2019), private federal corporations incorporated or continued under the Canada Business Corporations Act (CBCA) are required to report details about individuals who have "significant control" over affected corporations. Read TaxNewsFlash
Private corporations subject to these rules will be required to update their records on significant individuals annually. Transparency registries must be updated within 30 days of becoming aware of any changes to information on their registry. The new rules in British Columbia also include a duty to notify individuals whether they are identified as significant individuals or have ceased to be significant individuals. Non-compliant corporations risk penalties of up to $100,000.*
Shareholders of a private corporation must take all reasonable steps to respond to a private corporation's request for information to maintain its transparency register. Individuals who are non-compliant with this requirement may also face penalties of up to $50,000.
Read a November 2019 report prepared by the KPMG member firm in Canada
*$ = Canadian dollar
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