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The Company Owner’s Guide to B.C.’s New Transparency Register Requirements

The Company Owner’s Guide to B.C.’s New Transparency Register Requirements

Effective October 1, 2020, private companies governed by the British Columbia Business Corporations Act will need to maintain a transparency register listing significant individuals of the company. These new measures are a part of the B.C. government’s efforts to end hidden ownership of companies and to help counteract corruption, tax evasion, and money laundering.

The new transparency register requirements are legally mandated for all B.C. private companies. Therefore, companies will need to contact their shareholders to gather information about their ownership in order to prepare their transparency registers.

A basic understanding of how the transparency register requirements work and how one can determine whether an individual is a significant individual will assist companies to comply with these new transparency requirements.

Who is a Significant Individual?

The transparency register must list all significant individuals of the company. A significant individual is defined as an individual who has:

  • legal or beneficial ownership of 25% or more of the:
    • issued shares of the company; or
    • voting shares of the company;
  • indirect control of an intermediary[1] or a person that holds 25% or more of the:
    • issued shares of the company; or
    • voting shares of the company;
  • any of the following direct or indirect rights or abilities:
    • the right to elect, appoint or remove a majority of the directors of the company;
    • indirect control of the right to elect, appoint or remove a majority of the directors of the company;
  • direct and significant influence over an individual with the right or ability to elect, appoint or remove a majority of the directors; or
  • any combination of the foregoing.

 Interests or Rights Held Jointly

When two or more individuals jointly own one of the above interests or rights, then all those individuals are considered to be significant individuals and must be listed in the transparency register.

Interests or Rights Exercised in Concert

Also, groups of individuals who are acting in concert must add their interests together. If the group’s combined interests or rights meet the requirements to be a significant individual, then the company must list every member of the group in its transparency register, as all individuals in the group are considered to be significant individuals.

Further, individuals who have the following relationships with each other must also be included on the transparency register if their combined interests or rights meet the requirements to be a significant individual:

  • spouses;
  • parents and children; or
  • relatives who have the same house.

To assist companies in identifying significant individuals we have created a worksheet for you to download.

What information will be included in the transparency register?

The transparency register must contain the following information for each significant individual:

  • full legal name, date of birth and last known address[2];
  • 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 a resident in Canada for the purposes of the Income Tax Act (Canada);
  • the date on which the individual became or ceased to be a signficiant individual in respect of the company; and
  • a description of how the individual is a significant individual.

In addition, transparency registers also track steps taken to obtain information from significant individuals.

Do you have to notify an individual once it is determined that they are a significant individual?

A private company must, within 10 days after indicating in its transparency register that an individual:

  • is a significant individual in respect of the company; or
  • has ceased to be a significant individual in respect of the company,

send a notice to that individual that sets out this fact and the prescribed information, if any.

Do shareholders have any obligations to provide information in respect of a transparency register of a company?

A private company may, at any time, send to a shareholder of the company a request to provide information for the purposes of maintaining its transparency register. After receiving such a request, a shareholder must, after taking reasonable steps to compile the requested information, promptly send to the private company the information that the shareholder was able to compile in respect of the transparency register.

What are the requirements for newly incorporated companies?

Effective October 1, 2020, newly incorporated B.C. private companies will need to establish a transparency register upon incorporation.

Who prepares the transparency register for my company?

If McQuarrie is the registered and records office for your company, then we have prepared a draft transparency register for you. Please follow the instructions we have enclosed.

If McQuarrie is not the registered and records office for your company, you may engage us to help your company comply with this mandatory requirement. As such, please email us at [email protected] with the following subject line: “McQ Is Not R&R: Need Assistance with the Transparency Register”.

Who will have access to the transparency register?

Only current directors of the company, law enforcement and specific inspecting officials will have access to the transparency register, subject to certain rules. This means that the general public will not have access to the transparency register.

Where will the transparency register be located?

Generally, the transparency register must be held in each company’s own records office alongside its other corporate records. It is not filed with any government (or other publicly accessible) registry.

Will I need to maintain and update the transparency register?

Yes, companies must keep their transparency registers up-to-date and must update their transparency register within 30 days of becoming aware of any new or different information.

In addition, a private company must perform an annual review of the transparency register and take reasonable steps to confirm that the required information is accurate, complete, and up-to-date.

What if I don’t comply with the new transparency requirements?

Non-compliance with the new transparency requirements is an offence subject to possible fines of up to $50,000 for individuals and $100,000 for other persons.

What if I still have some questions?

We are here to help! If you have any questions or require assistance please email us at [email protected]

 Please note that in order to accurately identify and describe significant individuals you may need legal advice. If that is the case, additional legal fees may apply.

Additional resources:

The B.C. Registrar of Companies has also provided some useful guidance with respect to the transparency register.

We trust that this guide will help your private company (or companies) navigate the changing landscape of doing business in British Columbia.

[1] Intermediary means a corporation, partnership, agent, trustee or personal or other legal representatives. A chain of intermediaries, in relation to a private company, is a group of 2 or more intermediaries having a hierarchal relationship to each other in which each intermediary in the chain controls the intermediary below it, and the last intermediary in the chain (i) is the registered owner of one or more of the shares of the private company, or (ii) has the right to elect, appoint or remove one or more of the directors of the private company.

[2] According to the B.C. Registrar of Companies, individuals can list their business address as opposed to their home address on the transparency register as long as it is an address where the individual can be reached when required.

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