EN
Dear customer,
As of June 13, 2019, any private company incorporated under the Canada Business Corporations Act will have to comply with new standards aimed at preventing the use of companies for tax evasion and other criminal purposes including money laundering, corruption and the financing of terrorist activities.
Your company will have to maintain a new register that will appear in its minutes book, in the same way as the records of directors, securities and shareholders. This new register aims to list the individuals with significant control in a society. To determine this, the law provides for certain situations, including in particular (i) a person holding 25% or more of the shares with the right to vote in the capital stock of the company, (ii) a person holding 25% or more of the fair market value of the shares of the capital stock of the company or (iii) a person who, without necessarily holding shares in the company, exercises a direct or indirect influence resulting from the de facto control of the company.
Take reasonable steps to at least update the register of “individuals with significant control” once during each fiscal year of your company. To this end, the register should include a description of the measures taken by your company in order to comply with these new requirements. Of course, your company also has an ongoing obligation to record any new information it becomes aware of about an individual who has significant control in your company.
The information contained in the new register can be accessible to any shareholder and creditor of your company by first submitting an affidavit confirming that they will use this information exclusively in connection with the company's business.
Diligence and assiduity will be required in maintaining this register since the penalties associated with non-compliance with some of the measures provided for in the legislative amendments may be of the order of: $200,000 and/or six (6) months of imprisonment. In addition, not only directors and officers may incur these penalties, but also shareholders who have an obligation to provide the company with complete and accurate information that allows the said register to be maintained.
For the time being, these companies are not subject to any obligations. However, it is reasonable to think that the provinces, including Quebec, could follow the example in the near future.
That being said, please know that we remain available for any questions, requests for additional information and/or assistance in order to properly comply with these new provisions. So do not hesitate to let us know!
Please contact us to update your book.
