2019 Canadian Business Corporations Act Amendments

By Patrick O'Neil

In December of 2017, the Finance Minister for Canada and the provincial finance ministers reached an Agreement to Strengthen Beneficial Ownership Transparency, aimed at preventing the use of corporations for illegitimate purposes, such as money laundering, financing terrorism and corruption.

On December 13, 2018, Bill C-86 received Royal Assent. The Bill contains – among other things within its 884 pages – amendments to the Canada Business Corporations Act, RSC 1985, c C-44 (the “CBCA”). The amendments come into force on June 13, 2019, and are focused in part on identifying shareholders who have ‘significant control’ over CBCA corporations.


Individuals with significant control.

An individual has significant control where the individual is the registered holder, beneficial owner or has direct or indirect control over a ‘significant number of shares of the corporation’ – defined as shares carrying more than 25% of the corporation’s voting rights or 25% of the outstanding shares (measured by fair market value).

Additionally, an individual has significant control if the individual has direct or indirect influence that, if exercised, would result in control of fact of the corporation.

Effective June 13, 2019, all CBCA corporations will be required to prepare and maintain a register containing specific information regarding any individual having significant control (“ISC”) of the corporation, including:

the individual’s name, birthdate and last known address;

the individual’s jurisdiction of residence for tax purposes;

the day on which the individual became (and ceases being) an individual with significant control;

a description of how the individual is considered an individual with significant control; and

any other prescribed information.

In terms of ongoing maintenance of the registers, all federal corporations will need to update the registers at least once every financial year, and must update the register within fifteen days of becoming aware of information regarding ISCs.

The corporation, in its efforts to compile an accurate register, can request information from the corporation’s shareholders, who must provide the required information, to the best of their knowledge, in a timely manner. As part of this inquiry, corporations should determine whether a shareholder holds the share(s) in trust for another party.

Similarly, as the provisions include indirect or beneficial control, when compiling or updating the register, it is important to identify shareholders of corporations holding shares of a CBCA corporation in the event the holding corporation has significant control over a CBCA corporation.


Access to Register

The CBCA amendments require that a corporation disclose its register to the Director upon request. Additionally, the amendments permit access to the register by shareholders and creditors of the corporation, provided that certain procedural requirements are met.

Furthermore, Bill C-97 (which has not yet received Royal Assent) seeks to extend the ability to access the corporation’s register to investigative bodies. In particular, the proposed amendments broaden access to the register by extending to any police force and the Canada Revenue Agency.

The proposed amendments also outline the process by which these requests need to be made. In order to request information regarding ISCs, the investigative body must establish that the corporation or an ISC over the corporation committed or facilitated an offence being investigated by investigative body making the request, or protected a person who committed the offence from punishment or detection. 



The amendments make it an offence for a corporation to maintain and update the register, without reasonable cause, and subject the corporation to a maximum fine of $5,000.

The penalties are greater for officers, directors and shareholders, resulting in a maximum fine of $200,000, six months in prison, or both.

Any shareholder who fails to accurately and promptly provide the identifying information outlined above (to the best of his or her knowledge) commits an offence, while the amendments make it an offence for an officer or director to:

permit a corporation to fail to prepare and maintain the register,

prepare a register with information that the officer or director knows is false or misleading, or

to provide any person with false or misleading information.



In light of the agreement between the Finance Minister of Canada and the provincial finance ministers, it is expected that all provinces will follow suit with comparable legislation in the future.

In summary, the CBCA amendments require

federal corporations to prepare and maintain registries identifying ISCs of the corporation;

directors and officers to prepare, maintain, and ensure the accuracy of the register; and

shareholders provide directors with the identifying information outlined above, to the best of their knowledge.

As a result, if you are a director, officer or shareholder of a federal corporation, these amendments impose obligations which must be followed; otherwise, the amendments provide significant penalties for noncompliance.


This article is for information only and is not intended to be legal advice. If you have any questions or would like further information, you should consult a lawyer.