Surrey Business News

New Trans­parency Reg­is­ters For B.C. Pri­vate Com­pa­nies

In­di­vid­u­als with Sig­nif­i­cant Con­trol must be Dis­closed be­gin­ning May 2020

- Business · British Columbia · Bank Central Asia

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.

 ??  ?? Grant Fos­ter
Part­ner
+1 604 631 4916 gr­fos­ter@fasken.com
Grant Fos­ter Part­ner +1 604 631 4916 gr­fos­ter@fasken.com
 ??  ?? Dierk Ull­rich
Part­ner
+1 604 631 4847 dull­rich@fasken.com
Dierk Ull­rich Part­ner +1 604 631 4847 dull­rich@fasken.com

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