Beneficial Ownership of Privately Held Corporations in Ontario

What you need to know! — Information and filing duties.

As of January 1, 2023, privately held corporations in Ontario are required to keep their
beneficial ownership information, or “individuals with significant control” (ISC)
information, in the corporate minute book and are required to provide that information
when requested by law enforcement, and regulatory and tax authorities.

An ISC is defined as an individual who:

Owns, controls, or directs:

• 25% or more of the voting shares of the corporation, or
• shares worth 25% or more of the fair market value of all outstanding shares of
  the corporation.
• Exercises direct or indirect influence over the corporation without owning at least
  25% of the shares.
• Owns or controls a significant number of shares jointly with others.

In cases where a group of related persons collectively controls at least 25% of the
shares of a corporation, each person within the group is deemed an ISC.

Related persons include the individual and:

• Their spouse
• Their son or daughter
• Any other relative residing in the same household

For each ISC, the Ontario corporation must maintain the following information:

• Name, date of birth, and last known address.
• Residence jurisdiction for tax purposes.
• Date of becoming or ceasing to be an ISC.
• Description of how the ISC exercises control over the corporation, including
  interests and rights in shares.
• Description of the measures taken by the corporation to keep this information up-
  to-date annually.

This information must be updated:

• At least once annually.
• Within 15 days of the corporation becoming aware of any changes to relevant
  information.

Federal corporations governed by the Canada Business Corporations Act (CBCA) have
been obligated to maintain a register of ISC for the past four years.

The Canadian Federal Government has recently announced that corporations under the
CBCA must now provide beneficial ownership details to Corporations Canada for
improved corporate transparency. According to the new rules, businesses must file this
information with Corporations Canada:

• Upon incorporation.
• Within 30 days of amalgamation with another corporation.
• When filing their annual return.
• Within 15 days of any changes to ownership details.

For further information on beneficial ownership of privately held corporations, corporate
governance transparency or to discuss any other corporate matter, feel free to reach out the
lawyers at Rabideau Law. We can be reached at 1.888.820.1321 or notices@rabideaulaw.ca