CBCA registers of individuals with significant control: Public disclosure and enhanced penalties starting January 22

Major changes regarding registers of individuals with significant control (ISC registers) under the Canada Business Corporations Act (CBCA) will take effect on January 22, 2024. Starting on that date:

• A CBCA corporation that is required to maintain an ISC register must deliver information about its individuals with significant control (ISCs) to the Director under the CBCA (Director) at the same time as it files its annual return, within 15 days of any change to the information, upon incorporation and following an amalgamation or continuance under the CBCA. 
• The Director must make certain information about ISCs publicly available. 
• A register must contain a residential address and, if provided, an address for service for each ISC (currently, an ISC register must contain the latest known address for each ISC). If a residential address and an address for service are provided to the Director, only the address for service will be made public. However, if no address for service is provided, the residential address will be publicly available.
• The citizenship of each ISC must be listed in the ISC register and that information must be delivered to the Director but will not be made public. Collecting citizenship information is a new requirement.
• Monetary penalties applicable to directors, officers and shareholders for contraventions of the ISC provisions under the CBCA will significantly increase from up to $200,000 to up to $1 million, and imprisonment terms will increase from up to six months to up to five years. Penalties for such contraventions can include both monetary penalties and imprisonment.

Public company exemption

The requirement to create and maintain a register of ISCs is not new – private CBCA corporations have been required to do so since June 2019. Public corporations and their wholly owned subsidiaries continue to be exempt from the requirement. However, when filing its annual return, an exempt CBCA corporation will have to confirm the exemption on which it is relying.

Updating and sending information

At least once during each financial year of the corporation and otherwise on the request of the Director, a CBCA corporation must take reasonable steps to ensure that all ISCs have been identified and the information in the ISC register is accurate, complete and up to date. Regulations under the CBCA provide that reasonable steps include sending a request for information to any current ISCs, other shareholders and any other person the corporation has reasonable grounds to believe may have relevant knowledge.

Since information on ISCs must now be filed at the same time as a CBCA corporation files its annual return, we recommend that the annual review be timed to correspond with the annual return filing obligation. An annual return must be filed within 60 days of a corporation’s anniversary date (the date on which the corporation was incorporated or otherwise came into existence under the CBCA), not its year end.

In addition, as of January 22, information on ISCs must be sent to the Director in the following circumstances:

• within 15 days of any change to the information;
• upon incorporation under the CBCA; and
• within 30 days of an amalgamation or continuance under the CBCA.

Public information

The following information on ISCs will be made public on and after January 22, 2024, subject to the creation of a publicly available database:

• name;
• address for service, if provided;
• residential address if no address for service is provided;
• the day on which the individual became or ceased to be an ISC; and
• a description of how the individual is an ISC.

Information on ISCs who are under the age of 18 will not be made publicly available. In addition, on application the Director may determine not to make certain information publicly available if the subject individual is incapable or making such information available would present a serious threat to the safety of the individual. 

Investigative bodies and other government entities

The Director may provide all or part of the information received on an ISC to any police force, Canada Revenue Agency and any provincial equivalents and the Financial Transactions and Reports Analysis Centre of Canada. The Director may also provide all the information received on ISCs to provincial government departments responsible for corporate law.

Offences and penalties

The following offences and penalties are prescribed under the CBCA in relation to ISC registers: