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New Era of Transparency: Canada Mandates Disclosure of Significant Control in Federal Corporations

New Era of Transparency: Canada Mandates Disclosure of Significant Control in Federal Corporations

Effective January 22, 2024, federal corporations incorporated under the Canada Business Corporations Act are required to file information on their individuals with significant control (ISC) with Corporations Canada.

The new ISC register is part of the federal government’s efforts to enhance corporate transparency and combat money laundering and other illicit activities. It requires certain corporations to maintain a register of individuals who have significant control over the corporation. The ISC register must include information such as the individual’s name, date of birth, address, and details of their significant control. This includes individuals who own or control a significant number of shares, have significant influence over decision-making, or otherwise exercise control over the corporation.

Who Must be Listed in the ISC Register?

An ISC is someone who owns or controls a corporation. This individual:

  • owns, controls or directs 25% or more of shares individually, jointly or in concert with one or more individuals;
  • has control in fact over the corporation without owning any shares; or
  • meets a combination of any of these factors.

As for the definition of ‘25% or more of shares’ the government defines this as:

  • 25% or more of the shares that have the right to vote at shareholder meetings (also known as voting shares); or
  • 25% or more of all the shares based on the fair market value of the shares.

Impact on Transparency

Departing from the long-standing principle that a private company’s shareholders are private and not public, under the new ISC register rules, the register of controlling persons is made public record. This means that any person can search and pull the register which will reveal the names of the ultimate controlling persons or entities holding 25% or more of the issued capital of that corporation. Note however that sensitive information such as dates of birth and citizenship details will remain confidential and accessible only to law enforcement and authorized entities.

If it is your desire to keep ownership information private, you should not proceed to incorporate a federally governed corporation.

This significant change in the law has garnered mixed responses from the legal profession and across industry abroad. Some welcome the regulation as eliciting more transparency in corporate enterprise while others eschew the new rules as disclosing too much information to public record, contrary to longstanding legal principles that previously protected private company information as private.

Impact on Private Company Law

The introduction of the public register for individuals with significant control (ISC) will have several notable impacts on private company law in Canada. These impacts revolve around increased disclosure, compliance requirements, and the potential legal and operational consequences for private companies.

1. Increased Disclosure:

  • Private companies, which previously could maintain a degree of anonymity regarding their ultimate owners, will now have to disclose significant control information. This public disclosure helps build trust in corporate entities and can improve their reputation and relationships with stakeholders​.

2. Compliance and Administrative Burden:

  • Private companies must establish and maintain an up-to-date ISC register and ensure timely filings with Corporations Canada. This includes filing ISC information during incorporation, annually with returns, and within 15 days of any changes to ISC details​. The new requirements necessitate the implementation of internal processes to identify and document ISCs accurately. Companies must ensure ongoing compliance to avoid penalties, which can be substantial​.

3. Legal and Operational Implications:

  • Failure to comply with the ISC filing requirements can result in significant fines and penalties. Corporations that do not file the required information, or provide false information, face fines up to $100,000. Individuals responsible for non-compliance can face fines up to $1 million or imprisonment​.

4. Impact on Mergers and Acquisitions (M&A):

  • During M&A transactions, the need to disclose and update ISC information will add a layer of complexity. Parties involved in such transactions must ensure that ISC information is accurately transferred and filed in compliance with the new regulations​.

What to do if there are no ISCs

Most corporations have ISCs and are able to identify them. In a small number of unusual situations, a corporation will either:

  • have no ISCs (for example, all individuals own or control less than 25% of the shares of the corporation)
  • be unable to identify any ISCs (for example, not enough information could be obtained to determine if there are any ISCs)

If a corporation is unable to identify any ISCs over the corporation, the following information must be included in its ISC register:

  • A statement to the effect that:
    • the corporation has determined that it is unable to identify any ISCs over the corporation
    • there are no ISCs over the corporation
  • A summary of the steps the corporation took to try to identify these individuals

Filing Timeline:

This information must be proffered first at the time of incorporation and then updated annually and filed with the corporation’s annual return, or within 15 days of any changes to ISC information.


Overall, the public register for ISCs represents a significant shift in the regulatory environment for private companies in Canada, promoting greater transparency and accountability while imposing new compliance obligations.

-Shira Kalfa, BA, JD, Partner and Founder

Shira Kalfa is the founding partner of Kalfa Law Firm. Shira’s practice is focused in corporate-commercial and private M&A law including corporate reorganizations, corporate restructuring, mergers and acquisitions, commercial financing, secured lending and transactional law.
© Kalfa Law Firm, 2024

The above provides information of a general nature only. This does not constitute legal or accounting
advice. All transactions or circumstances vary, and specified legal advice is required to meet your
particular needs. If you have a legal question you should consult with a lawyer.

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