Bill C-86 (Budget Implementation Act, 2018, No. 2)
Private corporations incorporated under the Canada Business Corporations Act (CBCA) will need to adhere to new requirements that were introduced in Bill C-86, the Budget Implementation Act, 2018, No. 2. The bill received Royal Assent on December 13, 2018.
Private corporations incorporated under the CBCA will, starting June 13, 2019, be required to create and maintain a register of individuals who have "significant control" over the corporation. Individuals are considered to have significant control over the corporations if: (1) the individual has the ability to control the corporation through direct or indirect influence; or (2) the individual is the beneficial or registered owner of, or has control or direction over, a "significant number of shares" of the corporation (the threshold for "significant number of shares" is: (1) the owner of 25% or more of the outstanding shares of the corporation; or (2) owning 25% or more of the outstanding number of voting shares of the corporation. The new requirements in Bill C-86 also specify what information is to be maintained in the register for individuals who have significant control over the corporation. A corporation will also be required to maintain the accuracy of the information in the register at least once per fiscal year.
There are also serious consequences when corporations incorporated under the CBCA do not comply with these new provisions. Intentionally disregarding the requirements of Bill C-86 may result in six months imprisonment and/or a maximum fine of $200,000.