New Transparency Registers For B.C. Private Companies
Individuals with Significant Control must be Disclosed beginning May 2020
Private companies governed by the B.C. Business Corporations Act (“BCA”) will soon need to maintain a transparency register for individuals with significant control over the company. Recent amendments to the BCA will apply starting May 1, 2020.
Private BC Companies Must Create and Maintain Transparency Register
Every private company governed by the BCA must maintain an up-todate transparency register. New companies incorporated in B.C. must establish the transparency register upon incorporation. Reporting issuers in B.C. and other provinces and companies listed on certain Canadian and international stock exchanges are not considered “private”.
Private companies must also take reasonable steps to verify and update the information in the register annually and when they become aware of new or different information. This includes requesting relevant information from its shareholders.
Non-compliance with key legislative requirements can constitute an offence subject to a maximum fine of $50,000 for individuals and $100,000 for other persons.
Who are “Significant Individuals”?
The transparency register must list all “significant individuals” for the private company. Significant individuals are individuals who, individually or jointly:
- control a significant number of company shares (25% of voting shares or of all shares); or,
- have the right or ability to elect, appoint or remove the majority of the directors of the company.
How do Private Companies establish Transparency Registers?
The transparency register must be available from the company’s records office for inspection or copying by directors, police, certain tax authorities and regulators. The B.C. Registrar of Companies has provided a Template Transparency Register for download and use and has also published useful examples of transparency registers for common scenarios. In addition, a Template Questionnaire for shareholders or significant individuals is available to companies to gather the required information. Shareholders must take reasonable steps to compile the requested information and promptly provide it to the company.
If a company is unable to obtain or confirm some or all of the information required, the transparency register must identify the information it was unable to obtain or confirm and summarize the steps taken to obtain the information.
What is Next?
Private companies and their directors should use the time until May 1, 2020 to gather the information required to prepare their transparency registers and to analyze more complex ownership and control structures. Once transparency register requirements come into force, there will be no additional transitional period.
If you have any questions or need assistance with preparing your company’s transparency register, please feel free to contact us.