2019 Changes to Record Keeping Requirements for Ontario Corporations
With the new year upon us, our team here at Kutner Law LLP would like to wish all our clients and subscribers a healthy and prosperous 2019.
Certain changes to corporate law which were enacted at the end of 2018 may have implications for many of our clients who have corporate interests, including Professional Corporations and any other Ontario corporations that hold a legal or beneficial interest in real property (i.e. condos, buildings, plazas etc.). As per the amendments to the Ontario Business Corporations Act, all corporations that were incorporated prior to December 10, 2016 are now subject to more onerous record-keeping requirements in relation to any ownedreal property. Note: If your corporation was incorporated after December 10, 2016, your corporation is already subject to these changes.
Section 140.1 of the Ontario Business Corporations Act now provides that all Ontario corporations (including, dentistry professional corporations and medicine professional corporations) must create a register of any and all ownership interests in real property, regardless of whether it is a legal interest or beneficial interest. These registers must clearly identify (i) the property itself, (ii) the date that the corporation acquired ownership interest in the property, and (iii) if the property has been sold or disposed of, the date that the corporation disposed of the property.
Each Ontario corporation is required to keep a true copy of any deeds, transfers or similar documents containing any of the following information for each individual property listed in the register:
- The municipal address, if any;
- The registry or land titles division and the property identifier number;
- The legal description; or
- The assessment roll number, if any.
If you are a corporate client who is currently using our firm’s office address as their registered corporate office or if you are using our office to store your corporate minute book, please ensure that you provide us with the relevant information with respect to any properties your corporation may own and provide us with supporting documents as soon as possible. As mentioned above, these rules also apply to any Ontario corporation who may hold a beneficial interest in real property, whether they are co-owners, co-tenants, or have simply appointed a separate nominee corporation to hold legal registered title to a property.
We strongly suggest to all our corporate clients who have not yet set up a property register to contact us as soon as possible, as the property register must be ready and available for examination by all directors, shareholders, and creditors of the corporation during normal business hours.
Corporations that fail to follow the new record-keeping requirements may be subject to a maximum fine of $25,000, while each director and/or officer who authorized, permitted, or acquiesced in the offence may be subject to a fine of not more than $2,000 and/or a term of imprisonment of less than a year.If your corporation does not own any real property you do not have to do anything.