Transparency Register

All companies in British Columbia are required to create and maintain a transparency register. This transparency register must list everyone who is caught in the definition of being a “significant individual”. Failure to create or maintain an accurate transparency register may result in fines and penalties of up to $100,000.00. You may be contacted by the registered and records office for your Company to advise you of the changes affecting the Company and to seek your instructions regarding the updating of the Company’s records book in order to meet those requirements.

If you have questions about the transparency register, who may be a significant individual, or the possible penalties for non-compliance, please refer to the enclosed Frequently Asked Questions below.

Transparency Register FAQ

1. What is the definition of a significant individual?
The Act defines a significant individual as follows:

  • (a) the individual has (direct or indirect) registered or beneficial ownership or control of either (i) 25% or more of the issued shares of the company, or (ii) issued shares of the company that carry 25% or more of the rights to vote at general meetings; and/or
  • (b) the individual is able to (directly or indirectly) elect, appoint or remove the majority of the directors of the private company by way of any one or more of the following rights or abilities: (i) the right to elect, appoint or remove one or more of the company’s directors; (ii) indirect control of the right to elect, appoint or remove one or more of the company’s directors; and/or (iii) the ability to exercise direct and significant influence over an individual who has the right or indirect control described in the preceding subparagraphs (i) or (ii).” This means that, it is not only a shareholder that is a significant individual but also includes people with indirect ownership rights or interests in the Company.

2. Is Anyone Able to Access the Transparency Register?

No, the Transparency Register is not be accessible to the public in general. This register is only meant to be accessible by certain persons like the directors of the Company, the RCMP or police, the taxing authorities, and BC Securities Commission, other regulatory agencies of the government, the Financial Institutions Commission and the Law Society of BC.
Many lawyers in BC were particularly concerned with limiting the disclosure of this registry if implemented and advocated strongly for disclosure to be limited. It appears that legislature responded to those concerns by limiting the access to the transparency register.

3. WHAT IS THE REASON FOR THIS CHANGE?
The government believes that this increased transparency will reveal and decrease the risks of tax evasion, money laundering, corruption, misuse of corporations and criminal activities.

4. WHAT INFORMATION IS REQUIRED TO BE STORED IN THE TRANSPARENCY REGISTER?
The information required to be stored in the registry includes the following information about each significant individual:

  • (a) the individual’s full name, date of birth, and last known address;
  • (b) whether the individual is a Canadian citizen or permanent resident of Canada;
  • (c) if the individual is not a Canadian citizen or permanent resident of Canada, every country or state of which the individual is a citizen;
  • (d) whether the individual is resident in Canada for the purposes of the Income Tax Act (Canada) (the “ITA”);
  • (e) the date on which the individual became or ceased to be a significant individual in respect of the company;
  • (f) a description of the basis upon which the individual is a significant individual; and
  • (g) prescribed information, if any.

5. MUST I PROVIDE THIS INFORMATION?

It is a legal obligation for the Companies to provide a complete Transparency Registry before October 1, 2020. Our office is happy to help you with meeting this obligation but please be aware that ultimately the responsibility of meeting this obligation lies with the Company, its shareholders and its directors.

You should be aware that under the Act it will be an offence for private BC companies to fail to take reasonable steps to comply with the obligations listed above. It will be an offence for (a) any director or officer of a private company to authorize, permit or acquiesce to any such noncompliance; or (b) a shareholder to send information to the company that is false or misleading. An individual who commits any of these offences risks penalties of up to $50,000, and offenders that are non-human entities (such as private companies) risk penalties of up to $100,000.

We advise you of this not to scare you but to make you aware that the legal obligation for the Companies to provide a complete Transparency Registry before October 1, 2020 is yours.

6. WHAT TIME FRAMES DO I NEED TO BE AWARE OF WITH UPDATING OR MAINTAINING THE TRANSPARENCY REGISTER?

The following are important time frames you should be aware of regarding this registry:

  • (a) Upon adding or removing a “significant individual” to or from the Transparency Register, the company must notify said individual within 10 days.

  • (b) Upon receipt of any new relevant information, the company must update the Transparency Register with said information within 30 days.

  • (c) Each year during the 2-month period following the company’s anniversary of being incorporated or recognized in BC, the company must take reasonable steps to confirm that the Transparency Register is accurate, complete, and up to date.

  • (d) After an individual ceases to be a “significant individual”, the company must: i. continue to record this individual on the Transparency Register for a period of six years showing the date on which they ceased to be a “significant individual”; and ii. within one year of the sixth anniversary the date on which the individual ceased to be a “significant individual”, delete the individual from the Transparency Register and destroy any records with respect to this individual that relate to the Transparency Register.