Corporate Transparency Register Changes on the Horizon for British Columbia
As of October 1, 2020, private companies in British Columbia have been required to comply with disclosure requirements regarding their company’s beneficial ownership and control with the purpose of increasing corporate transparency to end hidden ownership. Companies are required to prepare and maintain a private company transparency register (“Transparency Register”) that includes information about individuals with significant control of the company or its shares, either directly or indirectly (a “Significant Individual”). Generally, the Transparency Register includes a Significant Individual’s full legal name, citizenship, last known address, and date of birth. This information has been accessible only to directors and certain government agencies pursuant to the Business Corporations Act (the “BCA”). For more information regarding the current requirements under the BCA, please see our earlier legal alerts: Update – New Disclosure Requirements for all British Columbia Companies and New Disclosure Requirements for all British Columbia Companies.
Changes to the BCA
Emulating the federal government’s recent initiative towards furthering transparency through a public beneficial ownership registry, the provincial government of British Columbia enacted the Business Corporations Amendment Act (the “BCAA”) on May 11, 2023. The BCAA modifies the existing Transparency Register’s requirements, introduces a publicly searchable registry (the “Registrar’s Transparency Register”) and strengthens the BCA’s enforcement mechanisms.
Changes to the existing Transparency Register’s requirements
The BCAA adds required information and actions respecting the Transparency Registers of private companies. The Transparency Register’s use and disclosure remains restricted.
Additional information required from Significant Individuals includes:
- their social insurance number;
- their individual tax number, if any; and
- where applicable, a statement setting out that they are incapable of managing their own affairs.
Changes to the Transparency Register filing requirements include:
- a shorter timeframe to update information in the Transparency Register, from 30 days to 15 days, where the company becomes aware of any new or different information regarding its Transparency Register; and
- requiring private companies to file certain information included on their Transparency Register with the registrar (this information is for the Registrar’s Transparency Register) both annually AND at other times. Other times include:
- within six months of the company being incorporated under the BCA; and
- within 15 days after the company becomes aware that any information is new or different from its Transparency Register.
The new Registrar’s Transparency Register
The new Registrar’s Transparency Register will contain the following publicly accessible information about Significant Individuals:
- their full name;
- year of birth;
- whether or not the individual is a Canadian citizen or permanent resident of Canada; and
- for residents that are not permanent residents, their citizenship.
However, the use and disclosure of information obtained from a Registrar’s Transparency Register is restricted to protect Significant Individuals. These protections include the prohibition of using information for the purposes of:
- soliciting persons by telephone, mail, or by other means;
- to harass persons; or
- for any other prescribed purposes.
Publicly accessible information will be omitted or obscured where the Significant Individual is under 19 years of age, or where they are deemed incapable of managing their own affairs. Further, Significant Individuals may apply to the registrar to omit or obscure publicly accessible information where they believe that this information would threaten either their own or a member of their household’s safety or health.
Strengthening enforcement mechanisms
Failing to comply with the corporate transparency rules set out in the BCA is already an offence. However, the BCAA introduces appointed enforcement officers who may demand, access and inspect Transparency Registers to determine their compliance under the BCA. These officers are permitted to impose administrative penalties of up to $25,000 on a Significant Individual and $50,000 on a company or entity, payable or disputable within 30 days of notice of the penalty. A limitation period is also added that restricts legal proceedings for offences respecting the Transparency Register under the BCA to 6 years, while other offences are permitted within 3 years after the commission of an offence.
While the BCAA received Royal Assent on May 11, 2023, the provisions as of the date of this publication have not yet been brought into force by regulation. The requirement for private companies to maintain Transparency Registers has been in effect since October 1, 2020, and with the recent enactment of the BCAA, the provincial government is on track to establish a searchable public registry by 2025.
Paul Tonita is a partner at Pushor Mitchell. His Commercial Law experience includes assisting clients, whether they are just getting involved with their first business, or they have established operations that require more sophisticated advice. These discussions often revolve around the various business structures, how to structure a corporation and get it off the ground. Paul has a great deal of experience in assisting clients with the transactional aspects of buying and selling businesses. He also works closely with commercial lenders as they help business owners get established or continue to grow. His clients often come to him to draft and advise on contracts and provide them with general advice.
Marina Nichols is a summer student at Pushor Mitchell and is completing law school at Thompson Rivers University. Marina completed her undergraduate degree in Management at the University of British Columbia Okanagan.