Individuals with Significant Control (ISC)
Over the last number of years Canadian corporate law has required corporations to maintain a register of Individuals with Significant Control (ISC). This register aims to increase transparency and prevent money laundering and other illicit activties by identifying the true owners and controllers of corporations.
As of January 22, 2024, corporations formed under
the Canada Business Corporations Act (CBCA) are required to file information on
their individuals with significant control (ISC) with Corporations Canada which are part of the public record. Quebec corporations also have public disclosure requirements for the Quebec equivalent of and ISC, known as the "Ultimate Beneficiary" owner. It is expected that more Canadian jurisdictions will follow the trend and add public disclosure requirements to ISCs.
The
ISC register is a document such as a logbook, database or spreadsheet that is
kept by a corporation and contains the following information about each individual
with significant control (ISC):
- full
legal name
- date
of birth
- country
(or countries) of citizenship
- country
(or countries) where the ISC is considered a resident for tax purposes
- residential
address
- address
for service (to be provided if the ISC does not want their residential address
being made public on Corporations Canada's website)
- the
day on which the individual became an ISC (for example, when the ISC purchased
25% or more of the corporation's shares)
- the
day on which the individual ceased to be an ISC (for example, when the ISC sold
their shares)
- a
description of the ISC's significant control
The ISC register must also include the steps
that the corporation took to update the ISC information. Corporations must
update their register annually OR within 15 days of becoming aware of a
change affecting their register.
Below is a summary table of the treshold for and ISC per Canadian jurisdiction:
|
Jurisdiction
|
Ownership Threshold
|
Control Consideration
|
Public Filing Required?
|
|
Federal
(CBCA)
|
≥25%
shares (voting or value)
|
Direct/indirect
control, joint control
|
Yes, filed with Corporations Canada
|
|
Ontario (OBCA)
|
≥25% shares (voting or value)
|
Direct/indirect control, joint control
|
No,
only internal records
|
|
British Columbia (BCBCA)
|
≥25% shares (voting or value) OR ability to
appoint/remove majority of directors
|
Transparency Register required
|
No,
but authorities can inspect
|
|
Quebec (REQ - ARPALPE)
|
>25% shares (voting or value) OR highest-ranking
officer if no UBO
|
Direct/indirect control
|
Yes,
public UBO disclosure
|
|
Alberta (ABCA)
|
No current requirement
|
No regulations in force yet
|
N/A
|
|
Other Provinces
|
≥25% shares (voting or value)
|
Direct/indirect control
|
No,
only internal records
|
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