Public transparency register, new reporting requirements and enforcement powers expected to come into force in 2025

Since October 2020, private companies in British Columbia have been required to maintain transparency registers. Intended to assist governments and law enforcement in fighting tax evasion, money laundering and terrorist financing, these registers must disclose "significant individuals" who, directly or indirectly, have substantial shareholdings in a B.C. company or who have the ability to exercise control or significant influence over a B.C. company.

With the enactment of the Business Corporations Amendment Act, 2023, on May 11, 2023, the B.C. government has set the course towards the introduction of a new public registry by 2025 that will contain all transparency register information and that will be searchable by the public.

B.C. Corporate Transparency Registers

Presently, every private B.C. company must maintain and review at least annually a transparency register of significant individuals (natural persons) who directly or as beneficiaries hold, or who directly or indirectly control, a significant number of shares of the company. A significant number of shares constitutes 25% of a company's voting shares or 25% of all of the company's shares. Generally, the transparency register must be maintained at the company's records office and is only accessible to directors and certain government officials (police, tax, and certain regulatory authorities). For more information on transparency registers, please see, for example, our bulletins: New Transparency Registers for B.C. Private Companies and Transparent in other Ways - New Exemptions to British Columbia's Corporate Transparency Register Rules.

A New Public Register by 2025

Following public consultations, the B.C. government has now decided to implement a new public register, to be maintained by the British Columbia Registrar of Companies (the "Registrar") that will contain the transparency information of private B.C. companies.

The introduction of a public transparency register in British Columbia follows similar developments in Quebec (please see our bulletin: Bill 78: What Impact will it Have for Enterprises?) and the recent initiative by the federal government of a public beneficial ownership registry (please see: Bill C-42 - An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts).

It also comes at a time when the Court of Justice of the European Union has struck down public access to beneficial ownership information in Europe as interfering with overarching privacy and data protection rights (please click here for the court's judgment).

However, in British Columbia signs point in a different direction. In the wake of the landowner transparency register ("LOTR"), which came into effect at the end of 20201, the new "Registrar's Transparency Register" will also be searchable by the public and appears to follow a similar structure and enforcement model as the LOTR.

Once the new amendments come into force, private B.C. companies must file the information contained in their transparency registers online in the Registrar's Transparency Register. These filing obligations arise:

  • Within six months after a private company is incorporated, amalgamated, restored, or continued into British Columbia;
  • On an annual basis; and
  • Within 15 days after the date a company becomes aware of any information that is new or different from its transparency register.

Registry Searchable by the Public

Members of the public will be able to obtain from the Registrar's Transparency Register the following information for significant individuals of any private B.C. company:

  • Full Name
  • Year of Birth
  • Whether or not the person is a Canadian citizen or permanent resident
  • For non-Canadians and individuals who are not permanent residents, their citizenship

Protections for Significant Individuals

Public access to the Registrar's Transparency Register is counter-balanced by protections for significant individuals:

  • The use or disclosure of publicly accessible information to harass or solicit significant individuals by telephone, mail or other means is expressly prohibited.
  • Significant individuals or their personal or legal representatives may apply to the Registrar to omit or obscure publicly accessible information if they believe that making the individual's information publicly accessible would threaten the safety or mental or physical health of them or a member of their household.
  • The Registrar must omit or obscure from publicly accessible information any information about a significant individual, if they are under 19 years old or have been deemed incapable of managing their own affairs.

Access by Canadian and International Government Agencies and Other Entities

In the same manner that police officers, tax authorities and certain regulatory authorities have access to a company's transparency register, they will also have full access to the Registrar's Transparency Register for law enforcement, tax, and regulatory purposes. Further, the B.C. government may enter into information sharing agreements with corporate registries elsewhere in or outside Canada and also with financial institutions such as authorized foreign banks, provincial credit unions, trust companies, loan companies and other entities identified in theProceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) to grant access to the Registrar's Transparency Register.

New Information to be Disclosed in Transparency Registers

Going forward, private companies must take reasonable steps to obtain and disclose in their transparency registers, additional personal information about significant individuals. In particular, transparency registers (including the information submitted to the Registrar's Transparency Register) must include for each significant individual:

  • Their social insurance number, if any;
  • Their individual tax number (a nine-digit number issued by the Canada Revenue Agency for non-resident individuals who require an identification number), if any; and
  • Where applicable, a statement setting out that the significant individual is incapable of managing their own affairs.

Where a private company becomes aware that a significant individual may be incapable of managing their own affairs, the company must take reasonable steps to ascertain whether a determination of incapability has been made by a court, health authority, or prescribed person.

Shorter Timeframe to Update Information in Transparency Register

Once the new amendments come into force, a private company must update information in their transparency register within 15 days (rather than the current 30 days) if the company:

  • Becomes aware of any new or different information that is required by the Business Corporations Act (British Columbia) (the "Act") to be in the transparency register; or
  • Had previously indicated it has no significant individuals and it becomes aware of new or different information that changes the accuracy of such statement.

More Teeth to Transparency - New Enforcement Officers, Administrative Penalties and Longer Limitation Periods

While failure to comply with many of the B.C. corporate transparency rules is already an offence under the Act, the new amendments introduce enforcement officers whose sole duty is to ensure compliance with the transparency requirements.

An enforcement officer may inspect, remove, and copy records kept at a company's records office, obtain warrants to enter private residences if necessary to inspect company records and demand information to determine whether a company, its shareholders or the person maintaining a company's records office have met their obligations with respect to transparency registers.

As an alternative to charging a person with an offence, an enforcement officer will have the power to impose administrative penalties of up to $25,000 for individuals and $50,000 for companies and other entities. Administrative penalties will be subject to dispute, appeal to the responsible minister and judicial review by the Supreme Court of British Columbia.

These new enforcement measures are buttressed by an extension of the applicable limitation periods. Offences relating to the Registrar's Transparency Register can be prosecuted for six years, compared to three years for all other offences.

Footnote

1. Please see our bulletins: British Columbia's New Land Owner Transparency Registry - What You Need To Know and Deadline Extended: More time to file in New Land Owner Transparency Register.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.