There are important upcoming changes to corporate law in BC, specifically the requirement of private companies to create and maintain a Transparency Register, which is a register of individuals having significant control over a company.
A new required Transparency Register must list:
- any individual who is the beneficial or registered owner of, or has “indirect control” or direction over, a number of shares carrying at least 25% of the outstanding voting rights of the Company;
- any individual who is the beneficial or registered owner of, or has “indirect control” over, 25% or more of the outstanding shares of the Company; and
- any individual who has the right or ability, directly or through “indirect control” to elect, appoint or remove the directors of the Company.
BC companies have until May 1, 2020 to bring themselves into compliance with this new Transparency Register requirement. We attach the following resources which may be helpful for BC companies:
- A guidance document providing a more detailed overview of the Transparency Register requirements;
- A template Transparency Register prepared by the British Columbia Registrar of Companies; and
- A template Significant Individual Information Sheet prepared by the British Columbia Registrar of Companies to be used to obtain the required information from shareholders.
The BC Registrar of Companies could impose a fine to any director, officer or shareholder of a BC company who contravenes the new Transparency Register rules of up to $50,000, and a company that fails to comply with its obligations respecting its Transparency Register could face a fine up to $100,000.
For more information regarding the Transparency Register and the obligations surrounding it, please also refer to the following link: https://www2.gov.bc.ca/gov/content/employment-business/business/bc-companies/bearer-share-certificate-transparency-register/significant-individual.