BCBCA Beneficial Ownership Register

May 7, 2019 | Sarah Fitzpatrick

In 2017, Canadian finance ministers entered into an Agreement to Strengthen Beneficial Ownership Transparency. The finance ministers agreed to introduce certain safeguards to prevent corporations and other legal entities from being used for tax evasion and other criminal purposes, including a commitment to make legislative changes to require corporations to maintain information on beneficial owners by July 1, 2019. We previously reported on amendments to the Canada Business Corporations Act (“CBCA”) (in force on June 13, 2019) which introduced a beneficial ownership register for CBCA corporations.

Bill 24, Business Corporations Amendment Act, 2019, proposes to introduce a beneficial ownership register for companies organized under the British Columbia Business Corporations Act (“BCBCA”). Bill 24 passed second reading on May 1, 2019 and is expected to come into force. If Bill 24 comes into force, all BCBCA private corporations (corporations other than reporting issuers, reporting issuer equivalents, publicly-listed corporations and corporations within prescribed classes) will be required to maintain a transparency register with information on significant individuals.

A significant individual is an individual who, with respect to the company:

  • in a significant number of the shares (25% or more of the issued shares, or 25% or more of the voting rights), has:
    • an interest as a registered owner;
    • an interest as a beneficial owner, other than an interest that is contingent on the death of another individual; and/or
    • indirect control (as defined in the regulations);
  • has the right, indirect control of the right, and/or the ability to exercise direct and significant influence over an individual who has the right or indirect control of the right to elect, appoint or remove a majority of the directors; or
  • has a prescribed interest, right or ability, or is subject to a prescribed criterion or circumstance.

If an interest or right is jointly held by one or more individuals, each individual is a significant individual.  A person will also be a significant individual if their interests, rights or abilities would meet one of the criteria described above when combined with the rights or abilities held by other individuals with whom they either: (i) have an agreement or arrangement to exercise their interests, rights or abilities jointly or in concert; or (ii) are an associate (as defined in s. 192(1)(c) or (d) – a spouse, son or daughter, or other relative of the person or their spouse who shares their home). In addition to setting out a number of definitions, the regulations may exclude classes of individuals from being significant individuals.

A company must take reasonable steps to maintain a transparency register that contains the following information on each significant individual:

  • the individual’s full name, date of birth and last known address;
  • whether 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 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;
  • a description of how the individual is a significant individual; and
  • prescribed information, if any.

The company has an obligation to update the transparency register within 30 days after becoming aware of any new information and to conduct an annual review to confirm that the information is accurate, complete and up-to-date. If a company has no significant individuals, the transparency register must contain a statement explaining that fact. If a company is unable to obtain or confirm some of the required information, the transparency register must contain the information that was obtained and a summary of steps taken to obtain the missing information. A shareholder has a duty to respond to a request by the company to provide information.

Directors of the company and inspecting officials will have the right to inspect and obtain copies of the transparency register. Inspecting officials are officials or employees of taxing authorities, police or RCMP officers, officials or employees of certain regulators, all of whom must be conducting an inspection for specific purposes set out in the BCBCA or its regulations. In contrast to the CBCA, shareholders and creditors will not have the right to inspect the transparency register.

Bill 24 will also introduce new offences. It will be an offence for a company to do the following in its transparency register:

  • identify an individual as a significant individual if that person is not a significant individual;
  • exclude an individual who is a significant individual; or
  • include information that is false or misleading in respect of any material fact, or omit information, if the omission makes the information false or misleading.

If a director or officer authorizes, permits or acquiesces in the commission of the offence by the company, they will commit an offence. A shareholder who sends information that is false or misleading or omits any material fact, the omission of which makes the information false or misleading, will also commit an offence. However, the company, directors, officers and shareholders will not have committed an offence if they did not know that the identification or exclusion of the individual was incorrect or that the information was false or misleading, and with the exercise of reasonable diligence, could not have known that the information was false or misleading. A person who commits an offence is liable, in the case of a person other than an individual, to a fine of not more than $100,000 or, in the case of an individual, to a fine of not more than $50,000.

In our previous newsletter on the amendments to the CBCA, we noted that the new rules impose significant new obligations on corporations and their professional advisors and that they will create a great deal of uncertainty in their application and compliance. The same concern applies with respect to the proposed amendments to the BCBCA. The company can be subject to significant liability for mischaracterizing an individual as a significant individual or failing to include an individual as a significant individual. However, there are a number of interpretive issues to consider when determining whether a person is a significant individual, particularly when dealing with someone who is not a registered owner. For instance, does a beneficial owner include a person who has a contingent interest in the shares? What does it mean for a person to have the indirect control of the right to elect directors or to have the ability to exercise direct and significant influence over other people who have the right to elect directors?

A copy of the current version of Bill 24 can be found on the Legislative Assembly of British Columbia’s website. If passed, the provisions on the transparency register will come into force by regulation of the Lieutenant Governor in Council.


This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

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