The Forfeited Corporate Property Act, 2015 (FCPA) comes into force on December 10, 2016. The FCPA will alter the way certain real property is dealt with on the dissolution of an Ontario corporation. When an Ontario corporation is dissolved, its real property automatically forfeits to the Ontario Crown. Historically, the forfeited real property could be recovered within 20 years after dissolution by reviving the corporation. The FCPA will provide that the real property may only be recovered if the revival takes place within three years of the dissolution.
Record-Keeping Obligations
The introduction of the FCPA has spurred changes to the record-keeping obligations of Ontario corporations under the Ontario Business Corporations Act (OBCA), which will also come into force on December 10, 2016. An Ontario corporation will now be required to maintain a register of its "ownership interests" in land in Ontario at its registered office. It is not clear from the OBCA amendments what is meant by "ownership interest". In addition to registered interests, beneficial and leasehold interests may be included under this concept.
What information must be included in the register?
The register must (1) identify each property and (2) indicate the date of its the acquisition or disposition. The corporation must also maintain supporting documentation including copies of deeds, transfers or other similar documents which contain the municipal address of the property, the registry office number and the property identifier number, the legal description, and the tax roll/assessment roll number, if any. These requirements will be set out in subsection 140(1) and section 140.1 of the OBCA.
Timeline for Compliance
Existing corporations have a two year grace period to comply (i.e. December 10, 2018); while corporations incorporated on or after December 10, 2016 must maintain such property register as of their date of incorporation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
