Endeavor Law had previously reported that Bill 24 (the Business Corporations Amendment Act, 2019) to amend British Columbia's Business Corporations Act (the "BCBCA") had received royal assent in the British Columbia legislature on May 17, 2019 (see here). The Business Corporations Amendment Act, 2019 is part of government’s commitment to end hidden ownership of companies in British Columbia and to help crack down on illegal activities by:
requiring B.C. private companies to create and maintain a transparency register listing the significant individuals (as that term is defined in the Business Corporations Amendment Act, 2019) of the company; and
fully eliminating bearer shares (share certificates that do not state the name of the owner of the shares which were only permitted under the previous British Columbia Company Act) in B.C. companies by requiring the possessor to exchange bearer shares for registered shares before exercising any of the rights.
Both measures are intended to help companies and, in some cases authorities, identify the actual individuals (i.e., natural persons) who own and control B.C. private companies. The amendments set out in the Business Corporations Amendment Act, 2019 will come into force on May 1, 2020.
Endeavor Law had also previously reported that the Parliament of Canada had given Royal Assent to Bill C-86 on December 13, 2018 which included amendments to multiple pieces of legislation including the Canada Business Corporations Act ("CBCA") which would now require that privately held federal corporations record individuals (a natural person) who have significant control over a corporation and that such amendments would come into force on June 13, 2019 (see here).
Effective May 1, 2020, amendments to the Business Corporations Act will require private businesses in B.C. to keep and maintain transparency records of beneficial owners, including individuals who have direct or indirect control of the company or its shares. Information collected includes full legal name, date of birth, citizenship and last known address. A transparency register is a list of information on a company’s significant individuals. A transparency register is specific only to private companies incorporated in B.C. and will be held in each company’s own records office. The public will not have access to the transparency register. Only current directors of the company, law enforcement and specific inspecting officials will have access, subject to certain rules.
Prior to May 1, 2020 private B.C. companies need to contact their shareholders to compile the required information necessary to determine if someone is a significant individual. Companies can request that their shareholders provide information for the transparency register at any time. Shareholders have a duty to take reasonable steps to gather the requested information and to send it to the private company promptly.
Once a company determines that someone is a significant individual, the company will have to notify that person.
Private B.C. companies need to prepare a transparency register and file the document with its other corporate records. Companies will also need keep their transparency register up-to-date and, specifically, make updates to their transparency register within 30 days of receiving new or different information.
Companies that are unable to obtain or confirm information from shareholders (for set-up and/or updating) must record all reasonable steps and efforts taken to gather the required information.
If a director or officer authorizes, permits or acquiesces in the commission of the offence by the company, they will commit an offence. A shareholder who sends information that is false or misleading or omits any material fact, the omission of which makes the information false or misleading, will also commit an offence. A person who commits an offence is liable, in the case of a person other than an individual, to a fine of not more than $100,000 or, in the case of an individual, to a fine of not more than $50,000. The company, directors, officers and shareholders will not have committed an offence if they did not know that the identification or exclusion of the individual was incorrect or that the information was false or misleading, and with the exercise of reasonable diligence, could not have known that the information was false or misleading.
Endeavor Law can assist BCBCA companies as well as any directors, officers or shareholders of such corporation with legal advice and services directed at compliance with these, and other, corporate regulatory matters. Endeavor Law will always seek to provide competitive pricing for any legal services requested and is pleased to discuss fee arrangements that suit any potential client.
Does not constitute legal or other advice and must not be used as a substitute for legal advice from a qualified legal professional in your jurisdiction who has been fully informed of your specific circumstance. Information may not be up-dated subsequent to its initial publication and may therefore be out of date at the time it is read or viewed. Always consult a qualified legal professional in your jurisdiction.