As of January 1, 2023, privately-held corporations incorporated in Ontario are required to establish and maintain a register with details of all “individuals with significant control” per the new requirements under the Business Corporations Act (Ontario) (the OBCA). Similar rules apply to federally incorporated businesses.
Companies can keep the information on file at the corporation’s registered office. Companies must provide this information to certain regulatory authorities if requested. The new OBCA register is not available to the public.
Individual with Significant Control
An individual with significant control is someone who:
- owns, controls, or directs:
- 25% or more of the voting shares of the corporation or
- shares that are worth 25% or more of the fair market value of all outstanding shares of the corporation
- has direct or indirect influence over the corporation without owning at least 25% of the shares, or
- owns or controls a significant number of shares jointly with other people.
If a group of related persons collectively controls at least 25% of the shares of a corporation, then each person would be an individual with significant control.
A related person would include the individual and:
- their spouse
- their son or daughter
- any other relative living in the same house
For each individual with significant control, the corporation must maintain the following information on file:
- Name, date of birth and last known address of each individual with significant control.
- Jurisdiction of residence for tax purposes.
- Day on which they became or stopped being an individual with significant control.
- Description of how the individual has significant control over the corporation, including a description of any interests and rights they have in shares of the corporation.
- Description of the steps the corporation takes to keep this information up-to-date each year.
The information must be updated at least once a year and within 15 days of the corporation becoming aware of a change to any relevant information.
Ontario corporations are entitled to request from their shareholders any information needed for the register. Shareholders have a statutory obligation to reply promptly, accurately, and completely, to the best of their knowledge.
Consequences of Non-compliance
Any director or officer of a corporation who knowingly authorizes, permits, or acquiesces in the corporation’s failure to maintain the register, in the recording of false or misleading information in the register, or provides any person or entity with false or misleading information relating to the register, is considered to have committed an offence under the OBCA.
Any shareholder who knowingly contravenes its obligation to reply accurately and completely to a request for information from the corporation commits an offence under the OBCA.
For any such offence, the director, officer, or shareholder, as applicable, is liable to a fine not exceeding CA$200,000, or to imprisonment for a term not exceeding six months, or both.
OBCA corporations that fail to properly create, maintain, or update their registers, or that fail to respond to proper enquiries concerning it are subject to a fine not exceeding $5,000 in any instance.