In its efforts to increase corporate transparency and accountability, the federal government has proposed legislation (Bill C-42) that would create a beneficial ownership registry for federally incorporated businesses.
The free and publicly accessible registry would disclose certain information on individuals who have ownership or significant control over corporations governed under the Canada Business Corporations Act (CBCA). The registry is intended to support law enforcement with investigations on money laundering, tax evasion and other financial crimes occuring through corporations.
The proposed legislation is based on feedback gathered during consultations conducted in 2020 with public and private stakeholders, including banks, industry associations, law enforcement agencies and the Canada Revenue Agency.
If Bill C-42 is passed into law, non-compliance could lead to administrative, financial and criminal penalties, including $200,000 in fines for directors, officers and shareholders as well as six months in prison. Corporations would be allowed a grace period to learn about the new requirements and submit the information to Corporations Canada (the regulatory body responsible for administering the CBCA). In its Annual Budget released on April 19, 2021, the Government of Canada had proposed the implementation of a corporate beneficial ownership registry by 2025.
See the official Government of Canada news release to learn more.