On October 1, 2020, there will be changes to British Columbia’s Business Corporations Act that will require every private company operating in the province to have a transparency register. The transparency register is part of the government’s commitment to crack down on illegal activities, often facilitated by secret ownerships. These changes were to be implemented on May 1 but were delayed due to the coronavirus pandemic.
If you operate a private company, here’s what you should know:
What is a transparency register?
A transparency register is a list that contains information regarding a private company’s significant individuals. A significant individual is described as anyone with direct or indirect control of at least 25% of the company’s shares or voting rights or one with authority to elect, appoint or remove a majority of the company’s directors or with influence over another with power to do so.
If there are individuals within the company who are related or acting in concert, then their interests or voting rights must be combined. If their collective shares or voting rights amount to 25% or higher, then these individuals must be added to the transparency register.
How to create a transparency register
A transparency register must contain the following information about each significant person:
- Full name
- Date of birth
- Citizenship information
- Whether the individual is registered to pay taxes in Canada
- The date on which they became or ceased to be a significant individual
- The reason the person is considered a significant individual
Once you have identified someone to be a significant individual, you must request the necessary information, which they are required by law to provide. If you are not able to obtain this information from any of the company’s significant individuals, list all the details you do have and document your attempts to confirm the details they have failed to provide and the date on which you made those attempts. After a transparency register has been created, a company must ensure the records are kept current and must make updates to the list within 30 days of receiving new information.
When a person ceases to be a significant individual, their record must be included in the register for six years. After that time has passed, it must be removed within a year. Note as well that you have ten days in which to inform any significant individual that you have added or removed them from the transparency register.
Who can request to view the transparency register?
The transparency register should be held within the company’s records office. The public will not have access to the transparency register. But the list must be made available to current directors as well as officials from the police force in BC, Royal Canadian Mounted Police, tax authority, Canada Revenue Agency, British Columbia Securities Commission, BC Financial Services Authority, Financial Transactions and Reports Analysis Centre of Canada, and the Law Society of British Columbia.
The person in charge of the records must know with whom they are sharing information. Therefore, they should require persons to present identification documents before they are allowed to gain access to the transparency register. The register must be available for access for at least two consecutive hours each business day, between the hours of 9 a.m. and 4 p.m.
How can a business lawyer help?
Failure to meet any of the obligations above may result in considerable fines. If you need assistance in preparing a transparency register, it would be wise to consult a business lawyer.
If you are searching for a business lawyer in Vancouver, contact us at Samuel Osei Law Corporation. Let us help you ensure your private company is operating in compliance with the Business Corporations Act.