On March 12, 2023, The Business Corporations Act, 20211 (the "new SBCA") and The Business Corporations Regulations, 2022,2 (the "Regulations") came into force in Saskatchewan. Key highlights of the new SBCA and Regulations are canvassed in a separate blog post which can be found here. One of the most noteworthy changes is the implementation of new rules surrounding individuals with significant control over a corporation. Additional details on individuals with significant control are as follows:
Definition of individuals with significant control
Under the new SBCA, a person is an individual with significant control if:
- They are the registered or beneficial owner of, or have direct
or indirect control over, a significant number of shares of the
corporation, meaning that they hold shares that:
- Carry 25% or more of the voting rights of the corporation's outstanding voting shares; or
- Are equal to 25% or more of the corporation's outstanding shares measured by fair market value.3
- They hold direct or indirect influence that, if exercised, would result in control of the corporation;4
- They meet any other prescribed circumstance.5
Currently, neither the new SBCA nor the Regulations prescribe any additional circumstances.
Two or more individuals may each be considered "an individual with significant control" if this interest or right concerning a significant number of shares is held jointly or subject to an agreement whereby the interest or right is to be exercised jointly.6
Register of individuals with significant control
Corporations are now required to maintain a register of individuals with significant control (the "Register") at their registered office or other address in Saskatchewan.7 The Register must include the following information about each individual with significant control:
- Their name, date of birth and last known address;8
- Their jurisdiction of tax residence;9
- The day on which they became or ceased to be an individual with significant control;10
- A description of how the individual is an individual with significant control, including their interests and their rights respecting shares of the corporation;11
- Any prescribed information;12 and
- A description of the steps the corporation took to identify individuals with significant control and to ensure the information in the Register is accurate and complete.13
A corporation must take reasonable steps to identify individuals with significant control and obtain up-to-date information from these individuals at least once per financial year.14 In addition, the Register must be updated within 15 days of the corporation becoming aware of a new individual with significant control or any updated information required under section 4-4(1).15
The new SBCA includes disclosure obligations regarding individuals with significant control. Corporations must disclose the information in their Register to the following, provided the request for disclosure is made in the appropriate form and for an applicable reason:16
- The Registrar;17 and
- Investigative services, including the Royal Canadian Mounted Police, police services, and the Canada Revenue Agency.18
Failure to comply with any requirements concerning an individual with significant control is an offence under the new SBCA.19 This may result in a fine of up to $10,000, imprisonment for up to 6 months, or both.20
This post is for information purposes only and should not be taken as legal opinions on any specific facts or circumstances. Counsel should be consulted concerning your own situation and any specific legal questions you may have.
1. The Business Corporations Act, 2021, SS 2021, c 6 [new SBCA].
2. The Business Corporations Regulations, 2022, Sask Reg 91/2022 [Regulations].
3. See new SBCA, supra note 1, s.1-3(1)(a) and 1-3(3).
4. See ibid, s 1-3(1)(b)
5. See ibid, s 1-3(1)(c).
6. See ibid, s 1-3(2).
7. See ibid, s 4-4(1). This address in Saskatchewan is designated by the directors. Note: this requirement does not apply to distributing corporations, Crown corporations or corporations which have complied with these requirements: see ibid, s 4-4(6) and the Regulations, supra note 2.
8. See new SBCA, supra note 1, s 4-4(1)(a).
9. See ibid, s 4-4(1)(b).
10. See ibid, s 4-4(1)(c).
11. See ibid, s 4-4(d).
12. See ibid, s 4-4(e).
13. See ibid, s 4-4(f).
14. See ibid, s4-4(3).
15. See ibid.
16. See ibid, ss4-6 and 4-7 generally. See also ibid, ss 4-6(3) and 4-7(3).
17. See ibid, s 4-6(1).
18. See ibid, s 4-7(2).
19. See ibid, s 4-9.
20. See ibid, s 22-21.
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.