On December 10, 2016 the Forfeited Corporate Property Act, 2015 (“FCPA”) came into force in Ontario. This act makes it easier for the Government of Ontario to use or sell property that has been forfeited to the Ontario Crown upon the dissolution of a corporation. In order to assist the Government in locating the assets of dissolved corporations, the FCPA amended the Ontario Business Corporations Act (“OBCA”) to increase the record-keeping obligations for corporations incorporated or continued in Ontario.
The new subsection 140.1 of the OBCA requires a corporation to prepare and maintain at its registered office a register of its ownership interests in land in Ontario. This register is to identify each property, and to provide the date the corporation acquired and disposed of (if applicable) the property. In addition, the corporation must keep with the register a copy of any deeds, transfers or similar documents that contain any of the following with respect to each property listed:
- the municipal address;
- the registry or land titles division and the property identifier number;
- the legal description; and
- the assessment roll number.
Existing companies that were incorporated or continued under the OBCA prior to December 10, 2016 have until December 10, 2018 to comply with the requirement for a real property register. Any company incorporated or continued under the OBCA on or after December 10, 2016 must maintain the register immediately. The act states that the register must be maintained at the “registered office” which may not necessarily be the place of business. If the registered office is the corporation’s lawyer’s office, for example, the corporation’s lawyer should be provided with the necessary information and documentation on an ongoing basis to keep the register up to date.
“Ownership interest in land” is not defined in the OBCA. While this clearly applies to situations where a company is the registered owner of land, it is unclear if it also applies to leasehold interests, easements, mortgages or to a beneficial interest in land where the property is held in trust for a corporation. The amendments to the OBCA do not apply to ownership interests in land located outside of Ontario.
The new record keeping requirements under the OBCA may not greatly impact corporations with minimal real property assets, but could be a substantial burden for corporations whose business is the acquisition and disposition of real property. Furthermore, corporations will need to be mindful of their new obligations under the OBCA when giving representations or warranties to third parties (e.g. lenders) that the corporation is in compliance with all applicable laws.
While neither the OBCA nor the FCPA set out what form the register of real property is to take, corporations can work with their legal counsel to develop a register that will meet the requirements.
Once more thing for corporations to think about.