Private Companies Incorporated in BC Must Keep a Transparency Register as of May 1, 2020

As of May 1, 2020, privately-held companies incorporated under the BC Business Corporations Act are required to create and maintain a "transparency register."
Categories: Business Insights
Dec 18th, 2019 | By: CapriCMW

As of May 1, 2020, privately-held companies incorporated under the BC Business Corporations Act are required to create and maintain a transparency register of "significant individuals." 

Significant individuals include anyone who:

  • directly or indirectly owns or controls 25% or more of the company's shares
  • directly or indirectly owns or controls 25% or more of the voting rights at annual general meetings
  • have the right to elect or appoint a majority of the board of directors

These new disclosure requirements are part of joint federal and provincial efforts to increase corporate transparency in Canada and combat tax evasion, money laundering, corruption, terrorist funding and other criminal activities.

Information Required for the Transparency Register

The information that must be disclosed for each individual on the register includes:

  • full name, date of birth and last known address
  • whether or not the individual is a Canadian citizen or permanent resident of Canada
  • if the individual is not a Canadian citizen or permanent resident of Canada, every country or state of which the individual is a citizen
  • whether or not the individual is resident in Canada for the purposes of the Income Tax Act (Canada)
  • the date on which the individual obtained significant control or ceased to hold significant control of the company
  • a description of how the individual has significant control

For any shareholders that are entities, the register must include the significant individuals who control, directly or indirectly, the entities.

In the event there is missing information about an individual, the register must include an explanation of why the information is missing and any steps taken to obtain and verify the required information.

When Does the Transparency Register Need to be Updated?

The register will be required to be updated, at minimum, once a year. Upon becoming aware of any information required to be included in the register, companies must update the register within 30 days. Companies must also notify individuals in writing within 10 days if they have been either added to the transparency register  or ceased to be a significant individual.

Records of individuals on the transparency register be maintained for six years after they cease to hold significant control of the company. Thereafter, the company must delete and destory the data within one year.

Who Has Access to the Register?

The register will not be available to the public but will be accessible to directors of the company and regulatory ‎authorities.

Penalties for Non-Compliance

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 $50,000 for individuals and up to $100,000 for corporations $200,000 in fines.

 

Visit this Government of BC webpage for information on creating your transparency register and click here for further details on what constitutes a "significant individual."

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

 

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