Beneficial ownership, corporate transparency and other updates affecting Newfoundland and Labrador corporations
Sarah Byrne and Tauna Staniland, QC
On November 16, 2021, the Government of Newfoundland and Labrador proclaimed into force Bill 24, which amends the Corporations Act, RSNL 1990, c C-36 (the “Act”). The amendments remove the residency requirements for directors and increase the transparency of beneficial ownership of corporations by placing additional record keeping requirements upon privately held Newfoundland and Labrador corporations.
With respect to the amendments to increase transparency of beneficial ownership, all corporations formed under the Act, aside from public corporations, are now required to maintain a register of individuals with significant control (“ISC Register”) which must be updated at least annually.
An “individual with significant control” over a corporation includes individuals who:
- directly or indirectly hold or control a significant number of shares; or
- have direct or indirect control or direction over a significant number of shares of the corporation, that, if exercised, would result in control in fact of the corporation.
Under the Act, a “significant number of shares” means (1) shares that carry 25% or more of the voting rights attached to all of the corporation’s outstanding voting shares; or (2) shares that represent 25% or more of all of the corporation’s outstanding shares as measured by fair market value.
The register must contain the following information about every individual with significant control:
- full name, date of birth and last known address;
- the jurisdiction of residence for tax purposes;
- the day they became, or ceased to be, an individual with significant control;
- a description of how each individual has significant control over the corporation;
- a description of each step taken to ensure the information is accurate; and
- any other prescribed information.
At least once during each financial year, a corporation must take reasonable steps to ensure that it has identified all individuals with significant control, and ensure that the information in the register is accurate, complete and up to date.
Non-compliance can result in fines of up to $200,000, imprisonment up to six months, or both, for directors, officers or shareholders. Corporations may be fined up to $5,000 for failing to maintain a register or for failing to comply with a request for information from an investigative body.
If you would like our assistance in complying with these legislative changes and preparing your ISC Register, or if you have any questions about the new disclosure requirements, please contact us at compliance@stewartmckelvey.com. If you do not respond to this communication we will assume that you are handling compliance internally.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Corporate Formation/Reorganization group.
Click here to subscribe to Stewart McKelvey Thought Leadership.
Archive
By Brittany C. Trafford, Brendan Sheridan and Kaitlyn Clarke Recently, the Government of Canada made a number of changes to the immigration landscape in an effort to rein in the population growth, address the housing supply…
Read MoreBy Jacob E. Zelman Many organizations in Canada rely heavily on the efforts of volunteers to assist with the delivery of services they provide. The Ontario Superior Court of Justice has recently provided new guidance…
Read MoreJoe Thorne & Jennifer Taylor In 2005, a bus accident occurred in Nova Scotia. The people injured in the accident were residents of Newfoundland and Labrador, which is where they sued the bus owner and driver…
Read MoreBy Killian McParland and Sophie Poulos As recently announced, the next Nova Scotia provincial election will be held on Tuesday, November 26, 2024. Under Nova Scotia’s Elections Act, every employee who is an eligible voter (i.e.…
Read MoreBy Sadira Jan, Dave Randell, Nancy Rubin, Kimberly MacLachlan, and Onye Njoku Bill 471, the Advancing Nova Scotia Opportunities Act, received Royal Assent and introduces changes to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation…
Read MoreBy Sadira Jan, Dave Randell, Nancy Rubin, G. John Samms, Kimberly MacLachlan, and Jamie Gamblin Bill C-49 received Royal Assent and will amend the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act and the Canada-Nova Scotia…
Read MoreBy John Morse The New Brunswick provincial election is set to take place on Monday, October 21, 2024, with polling hours between 10:00 a.m. to 8:00 p.m. Under the New Brunswick Elections Act, all employees…
Read MoreLevel Chan and Dante Manna On September 9, 2024, the Canadian Association of Pension Supervisory Authorities (CAPSA) released the long-awaited final revisions to Guideline No. 3 – Guideline for Capital Accumulation Plans (CAPs) and the…
Read MoreSean Kelly and Tiegan A. Scott On September 5, 2024, the “Stronger Workplaces for Nova Scotia Act” (Bill No. 464) was introduced in the Nova Scotia House of Assembly for first reading by the Honourable Jill Balser…
Read MoreJohn A.C. Morse and Lauren Sorel The Human Rights Tribunal of Alberta (the “Tribunal”) recently awarded three complainants a total of $273,274.91 in compensation, with $155,000.00 of this amount designated as general damages – a…
Read More