Recent changes to the BC Business Corporations Act mean that effective October 1st, 2020, private companies in BC will be required to establish and maintain a transparency register of “significant individuals” that directly or indirectly:
- own or control 25% or more of the issued shares of the company; or
- own or control 25% or more of the voting shares of the company; or
- have the right or ability to elect, appoint or remove the majority of the directors of the private company.
Individuals will also be listed as “significant individuals” if they hold the above interests, rights, or abilities alone or jointly with others, or if they have such interests, rights or abilities that, when combined with the interests, rights and abilities of certain other individuals (close relatives or parties that have agreed to act in concert with each other), fall into the above categories.
The new requirement is being implemented as part of the BC government’s commitment to reducing illegal activities such as money laundering, terrorist financing, and tax evasion.
The transparency register will list the following information for each significant individual:
- the individual’s 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 became or ceased to be a significant individual; and
- a description of how the individual qualifies as a significant individual.
Companies can ask their shareholders to provide information for the transparency register at any time. Shareholders have a duty to take reasonable steps to gather the requested information and to promptly send it to the company. If a company is unable to obtain or confirm information from shareholders, the company must record all reasonable steps and efforts taken to gather the required information.
Companies must give notice to each person listed on the transparency register that they have been listed.
Once established, companies must make updates to their transparency register within 30 days of receiving new or different information. Companies must also review their transparency register annually and confirm that the transparency register is accurate, complete and up to date.
A significant individual’s information will remain in the transparency register for 6 years after the individual ceases to be a significant individual. After the expiry of the 6 year period, the company must delete the individual and all info about the individual from the transparency register, as well as any record that the company created or received in respect of the individual for the purposes of maintaining the transparency register.
Davidson’s corporate records team will be contacting companies for whom we act as registered and records office to assist in the creation of the transparency register.
For further information on the transparency register, the BC Government has information that can be found at the following link: https://www2.gov.bc.ca/gov/content/employment-business/business/bc-companies/bearer-share-certificate-transparency-register
If you have any questions regarding these requirements, please reach out to our associates,