New Record Keeping Requirements For Corporations
If you are involved in a private Ontario corporation, whether as a director, officer or shareholder, you may be aware that there are a number of record-keeping requirements that need to be met. These requirements include maintaining an up-to-date list of the directors, officers and shareholders of the corporation, as well as the details of the head office of the corporation, and all share transfers that take place. These requirements are set out in the Business Corporations Act (Ontario) (the “Act”).
Recent amendments to the Act have created a new register that needs to be maintained by a corporation: a corporate property register. These amendments came into effect in December 2016, and may become quite a burden on Ontario corporations that frequently buy and/or sell real property, such as developers.
The purpose of this new requirement is to ensure that a corporation’s interest in land is known, and is transferred or dealt with prior to a corporation dissolving. It should be noted that this requirement applies only to real property ownership in Ontario; however, ownership is not defined, and as such, may broadly include registered interests, beneficial interests, as well as leasehold interests. This is yet to be determined.
The information that is to be included on the property register is as follows:
- The date the real property was acquired (and subsequently disposed of);
- The municipal address;
- The registry or land titles division where the real property is, and the PIN (property identifier number);
- The legal description of the real property; and
All corporations incorporated prior to December 10, 2016 must be in compliance with the above by December 10, 2018. If corporations were incorporated after December 10, 2016 this is a requirement that should already be met. Failure to comply with these requirements may result in the corporation being found guilty of an offence, and liable for a penalty of up to $25,000.00, in addition to potential individual director/officer liability.
Please contact our corporate department to discuss this new requirement, or to provide information on real property interests to be added to your corporation’s property register.
** This article is intended only to inform and educate. It is not legal advice. Be sure to contact a lawyer to obtain legal advice on any specific matter.