BENEFICIAL OWNERSHIP OF CORPORATIONS: More Information to Be Disclosed

29 Jun BENEFICIAL OWNERSHIP OF CORPORATIONS: More Information to Be Disclosed

There is a global trend emerging focused on requiring corporations to disclose the identity of their beneficial owners. Beneficial owners are generally individuals that either directly or indirectly exercise ultimate ownership or control over a corporation.

The 2021 Federal Budget in Canada provided $2.1 million to support the implementation of a publicly accessible corporate beneficial ownership registry by 2025. Some provinces have also commenced work on such disclosures.

As an example of what may come, consider the developments in the U.S. and U.K.

United States

On January 1, 2021, the National Defense Authorization Act for Fiscal 2021 was enacted. This Bill contained the Corporate Transparency Act, which introduced significant disclosure of beneficial ownership requirements. The legislation will apply to private corporations and limited liability companies (LLCs) registered to do business in the U.S. (including both domestic and foreign corporations) but will exclude a few types of entities, such as publicly listed corporations. Identifying information of beneficial owners that have substantial control will be required to be disclosed for new entities and those entities that have changes. Information collected will be available to law enforcement agencies, but not to the general public.

United Kingdom

In 2016, the U.K. launched a publicly accessible register of beneficial owners of companies (the register of Persons with Significant Control). The information displayed can basically be used by organizations and individuals without restriction. The minimum share percentageownership at which disclosure is required is 25%.

ACTION ITEM: Identifying information of beneficial owners of corporations may be required to be disclosed in the near future.