New Record Keeping Requirements for Private, Federally-Incorporated Businesses Come in Effect June 13, 2019

As of June 13, 2019, private companies incorporated under the Canada Business Corporations Act will be subject to new record keeping requirements.
Categories: Business Insurance, Business Insights
Feb 13th, 2019 | By: CapriCMW

As of June 13, 2019, private companies incorporated under the Canada Business Corporations Act (CBCA) will be subject to new record keeping requirements. These CBCA amendments are part of federal efforts to increase corporate transparency in Canada and combat tax evasion, money laundering, corruption, terrorist funding and other criminal activities.

Under the new requirements, private federally-incorporated businesses must keep a register of individuals that either directly or indirectly have "significant control" over the corporation. Individuals are considered to have "significant control" if they are registered or beneficial owners, or have either direct or indirect control/direction of:

  • 25% or more of the outstanding number of voting shares
  • 25% of more of the outstanding shares, measured by the fair market value

An "individual" could also be multiple people who jointly own shares. 

Corporations will be required, at minimum, to update this register once a year. Upon becoming aware of any information required to be included in the register, corporations must update the register within 15 days. This information includes:

  • name
  • date of birth
  • last known address
  • jurisdiction of residence for tax purposes
  • date on which the individual obtained significant control and ceased to hold significant control of the corporation
  • description of how the individual has significant control
  • description of steps taken to update the record

Although not available to the public, this register will be accessible to shareholders and creditors of the corporation.

Directors, officers and shareholders will be held personal liable for ensuring the corporation is complying with new requirements. Penalties for offences could be up to $200,000 in fines and/or six months imprisonment. 

Regulations for these new requirements have yet to be published. For some further details and background information, please see "Behind the Corporate Veil: New Ownership Record Rules in Canada" by Gowling LLP.

For insurance and risk management information and resources, please contact a CapriCMW Risk Advisor

Recent Blog Posts

Personal Insurance / Home Insurance, Water Damage, overland water, flood
Why You Need Overland Water Coverage for Your Home

Due to severe weather events, flooding is the most frequent and costly natural disaster in Canada.

Mar 20th, 2019 | By: CapriCMW
Business Insurance / Manufacturing, innovation, SME
Government of Canada Announces $100 Million Funding for Steel and Aluminum Manufacturers and Users

The federal government has announced the launch of the Regional Economic Growth through…

Mar 13th, 2019 | By: CapriCMW
Business Insurance
WorkSafeBC's 2019 Plans for Reducing Serious Injuries in Construction

On average, serious injuries occur far more often - three times more, in fact, according to…

Mar 5th, 2019 | By: CapriCMW
Search the Blog

Confidence and Freedom

At CapriCMW, we provide personalized insurance and custom risk solutions to give you the confidence and freedom to focus on what matters to you. Talk to an Advisor or get a quote today.

Get a Quote    Or call 1-800-670-1877

Can’t find what you are looking for? Ask us!