Transparency: an introduction to businesses’ obligations under the Canada Business Corporations Act.

What is Transparency?

The Canadian and provincial governments have taken steps to ensure that Canada is an attractive place to do business while protecting the safety and economic interests of Canadians through measures against illicit activities such as money laundering, terrorist financing, tax evasion and tax avoidance. One of the main tools in the government’s arsenal is to enact amendments to corporate statutes to enhance transparency around the ultimate ownership and control of corporations. These amendments to the CBCA are part of the federal government’s long-term objective to create a national, public and searchable beneficial ownership registry.

The Current Federal Requirement

The Canada Business Corporations Act (“CBCA”) requires federally incorporated, privately held corporations to prepare and maintain a register disclosing individuals with significant control over the Corporation (“ISC Register”). The ISC Register is required to be updated regularly, and maintained at the registered office or other location in Canada.

Who is an “Individual with significant control”?

An individual with significant control is someone who: owns a “significant number” of shares of the corporation (number of shares that represents at least 25% of the voting rights attached to the corporation’s shares, or 25% of the fair market value of the corporation’s shares; controls or directs a significant number of shares; has “significant influence” over the corporation, without necessarily owning a significant number of shares; or has a combination of any of these factors.


Creating and maintaining the ISC Register requires corporations to consider not only whether the threshold of share ownership is met, but whether there are individuals who, despite not holding a significant number of shares, are in a position to exercise “significant influence” over the corporation, a term which is not defined.

Information included in the ISC Register

The information required to be recorded in the ISC Register includes: name, date of birth, and latest known address; the jurisdiction of residence for tax purposes; the date the individual acquired significant control; the date the individual ceased to have significant control; a description of how each individual has significant control; and a description of the steps taken by the corporation to identify individuals with significant control and to update that information.

Who has access to the ISC Register?

The ISC Register is not required to be provided to Corporations Canada, and it is not generally available to the public. It does however have to be made available on request to Corporations Canada, to police, tax and other regulatory authorities and to shareholders and creditors if they provide an affidavit stating that the information is required for the “affairs of the corporation” (such as efforts to influence a vote or to acquire shares).

Requirement to update the ISC Register

A corporation is required, at least annually, to take reasonable steps to ensure that it has identified all individuals with significant control over the corporation and that the information in the register is accurate, complete and up to date. Corporations are also required to update their ISC Register within 15 days of becoming aware of any information that must be declared in the register.

“A corporation is required, at least annually, to take reasonable steps to ensure that it has identified all individuals with significant control.”

Penalties for Non-Compliance

The offences for non-compliance carry serious penalties – a fine of up to $200,000 and/or six months’ imprisonment – and corporations and their directors, officers or shareholders can be charged if they knowingly contravene the requirements.

Where do the Provinces Stand?

Transparency rules similar to those found in the CBCA exist or are expected to come into force in various provinces. In Ontario, for example, amendments to the Business Corporations Act adopting similar transparency rules will come into force on January 1, 2023.

Mandatory Reporting Requirements on Corporate Beneficial Ownership

Amendments to the CBCA received Royal Assent on June 23, 2022 which, when enacted, will require private federal business corporations to submit beneficial ownership information directly to the federal government. They will be required to report the information in their ISC Register to Corporations Canada on an annual basis and within 15 days of any change to the information contained in their ISC Register. Corporations Canada will also have the authority to provide all or part of this information to investigative bodies and other entities.

The Future

It is intended that these reports will form the foundation of the national, public and searchable beneficial ownership registry planned by the federal government. The full implementation of such a searchable registry will require significant advancement by and cooperation of the provinces.