New CBCA filing requirements and the US Corporate Transparency Act

In 2019, the Canada Business Corporations Act (CBCA) outlined a requirement for private incorporated companies to create and maintain a record of Individuals with Significant Control (ISCs).¹ Known as beneficial ownership reporting or corporate transparency reporting, the purpose was to increase transparency in corporate ownership to assist in the fight against money laundering, terrorist financing and other financial crimes.²

The CBCA regulations were recently amended to clarify the original 2019 filing requirement. Since January 22, 2024, the regulation, called the “Register of Individuals with Significant Control (ISC Register)”, now requires CBCA incorporated companies to submit ISC records to Corporations Canada.³

The US has a similar legislation, known as the Corporate Transparency Act (CTA), which came into effect on January 1, 2024.⁴ This corporate transparency reporting is for companies that are formed in the US or formed outside of the US but registered to do business in the US. The “Beneficial Ownership Information Reporting (BOI Report)” requires these companies to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN).⁵

Who are ISCs?

In terms of the CBCA, an ISC may be someone who “owns, controls or directs 25% or more of shares individually, jointly or in concert with one or more individuals”,⁶ among other factors.

Similarly, the CTA includes beneficial owners, those who have substantial control over the entity or who own or control 25% or more of the ownership interest in the entity (subject to certain exceptions), and applicants who have created or registered a company after January 1, 2024.⁷

How often do companies need to report?

For CBCA companies subject to ISC Register requirements, the ISC information needs to be filed with Corporations Canada annually, at the same time as the annual return, and if there are any changes to the ISC register, these need to be filed within 15 days of the change.⁸

For the CTA, companies registered or created before January 1, 2024, have until January 1, 2025 to file their first report. Companies registered or created since January 1, 2024, must file their first report within 30 days of creation.⁹

What does this mean for your law firm?

This new reporting requirement may prove burdensome for your law firm if you are managing the minute books for private company clients. To take this time-consuming task off your hands, consider referring your private company clients to a transfer agent, like Computershare. We specialize in managing and maintaining records and registers for companies of all sizes and tracking shareholder changes.

If you need assistance in meeting the CBCA and/or CTA regulations, we can help. Contact me at Mike.Tuff@Computershare.com to discuss.