New ISC reporting rules for CBCA corporations

Summary#

This Order fixes January 22, 2024 as the day when sections 1 to 19 of An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts come into force. In practice, it starts new rules that make federally incorporated companies collect and file more information about people who “have significant control” over them, and lets the federal registry publish some of that information.

What it does#

• Brings into force sections 1 to 19 of the Act on January 22, 2024.
• Requires corporations governed by the Canada Business Corporations Act to collect extra information about their individuals with significant control (ISCs), including citizenship and an option to provide an address for service instead of a residential address.
• Requires those corporations to send ISC information to the federal registrar (the Director under the CBCA).
• Requires the Director to make some ISC information public, specifically:
  • the ISC’s name;
  • the ISC’s residential address or an address for service if one is provided;
  • the date the person became and ceased to be an ISC; and
  • a short description of how the person is an ISC.
• Allows the Director to share all or part of ISC information with investigative bodies, FINTRAC, or other prescribed entities.
• Gives the Director stronger compliance tools, including the ability to refuse a certificate of compliance or issue a certificate of dissolution when a corporation fails to meet ISC filing obligations.
• Protects certain people from having ISC information published, including individuals under the age of 18 years, people legally declared incapable, and people whose safety would be seriously at risk if their information were public.

Who's affected#

• Federally incorporated companies — those governed by the Canada Business Corporations Act — must collect and file the new ISC details.
• People who are ISCs (owners or controllers of those corporations) may see some of their information placed on a public record.
• Corporate lawyers, accountants, and company service providers will likely handle the new collection and filing work.
• Investigative bodies and regulators (including FINTRAC) may get access to the filed information.
• The general public gains access to parts of the ISC registry.

Why it matters#

• This change increases transparency about who actually controls companies registered federally in Canada. That can help investigators and regulators spot abuse, tax evasion, or money laundering.
• It creates a new privacy trade-off for company controllers: more public visibility of ownership in exchange for stronger public and regulatory oversight. The new rules include protections for minors, people who are legally incapable, and those at serious risk.
• Corporations that don’t comply risk administrative penalties such as refusal of compliance certificates or dissolution, so businesses need to update their record-keeping and filing practices by the effective date.