Public Registry - Transparency Requirements for B.C. Companies
Understanding British Columbia’s Corporate Transparency Requirements: Key Changes and What They Mean for Private Companies
Since October 1, 2020, private companies in British Columbia have been subject to new transparency requirements under Part 4.1, Section 119 of the Business Corporations Act. These regulations mandate that companies maintain a transparency register, documenting details about individuals who have significant control over the business.
Who Qualifies as a Significant Individual?
An individual is considered a "significant individual" if they meet at least one of the following criteria:
They hold an interest in at least 25% of the company’s issued shares, as recorded in the central security register.
They have the authority, either alone or in combination with others, to appoint, elect, or remove a majority of the company's directors.
They exercise control through agreements or understandings with other shareholders.
Significant individuals may be registered owners of shares, beneficial owners not listed in the central securities register, or individuals entitled to the economic benefits of ownership.
Legislative Updates: Bill 20 and the Introduction of a Public Transparency Register
On March 29, 2023, the Legislative Assembly of British Columbia introduced Bill 20, proposing significant amendments to the Business Corporations Act. These changes include the creation of a publicly accessible corporate transparency register, expected to be operational in 2025. This new register aims to enhance corporate accountability by making ownership information about private companies available to the public.
Key Provisions of the Public Registry:
Publicly available information will include the full name, year of birth, and citizenship of significant individuals.
Data will become accessible 90 days after filing, similar to the Land Owner Transparency Register (LOTR).
Private companies must update the registry annually and whenever there are changes in ownership or control.
Compliance Obligations for Private Companies
To align with these upcoming changes, private companies will be required to:
Submit transparency register updates within 15 days of becoming aware of changes.
Provide additional details, including significant individuals’ Social Insurance Numbers (SIN) and Canada Revenue Agency tax numbers.
Report whether a significant individual is incapable of managing their own affairs.
Failure to comply with these regulations may result in substantial penalties, including fines up to $25,000 for individuals and $50,000 for corporations.
Preparing for Compliance
As these legislative amendments move toward implementation, private companies should take proactive steps to ensure compliance:
Review existing transparency registers to verify completeness and accuracy.
Update shareholder records to reflect any ownership changes.
Confirm director details and file necessary updates within 15 days of any changes, as required under Section 127 of the Act.
While these changes introduce new regulatory responsibilities, they also promote greater corporate accountability and transparency in British Columbia’s business landscape. Companies should stay informed and take appropriate measures to ensure compliance with both existing and forthcoming regulations.