The Manitoba government had previously introduced legislation to reduce interprovincial trade barriers while improving business ownership transparency. Some of these legislative provisions came into force on April 9, 2020, while others will be coming into effect on June 27, 2020.
The relevant legislation amends The Business Names Registration Act, The Cooperatives Act, The Corporations Act and The Partnership Act. The full text of the Act is available here.
Below is a summary of the key changes. If you have any questions, please feel free to email [email protected] or any one of our lawyers.
Corporate Control Transparency
Companies incorporated under The Corporations Act are now subject to a new requirement to prepare and maintain a register of “individuals with significant control” over the corporation.
This transparency initiative is part of a global effort to improve corporate transparency and combat serious financial crime. The Manitoba amendments came into force on April 9, 2020, and are harmonized with recent changes to federal legislation respecting ownership transparency.
Whose names go in the Register?
An individual has significant control if they have a 25% interest in the corporation or if they have a “direct or indirect influence that, if exercised, would result in control in fact of the corporation”.
The 25% “interest” of an individual can take any one of three forms (alone or in combination):
- shares that they hold as a registered shareholder;
- shares that they beneficially own; or
- shares over which that they have a direct or indirect control or direction.
The above also applies to shares held jointly by two or more individuals.
What information must the Register contain?
The Register must include the following information for each significant individual:
- Full name, date of birth and last known address;
- The jurisdiction of residence for income tax purposes;
- A description of how the individual is a significant individual; and
- The date on which the individual became or ceased to be a significant individual.
At least once during each financial year, the corporation must take steps to ensure that the information in the Register is accurate, complete and up-to-date. Corporations must update the Register within 15 days of becoming aware of any information required to be recorded. There are penalties for non-compliance and for providing false or misleading information.
Reporting issuers, publicly traded corporations, licensed insurers and loan and trust corporations are exempt.
Corporations and cooperatives are no longer allowed to issue options or other instruments that are convertible into bearer form. Holders of such instruments can require the corporation or cooperative that issued them to convert them into registered form.
A series of amendments were made to Manitoba’s business statutes to allow Registrars to enter into agreements with other Canadian jurisdictions respecting the extra-provincial registration of corporations, partnerships and cooperatives.
Cabinet may make regulations about such registrations. Extra-provincial limited partnerships can now be registered in Manitoba. Extra-provincial limited liability partnerships that have an attorney for service no longer require a registered office in Manitoba.
These amendments were required to officially adopt the New West Partnership Trade Agreement (NWPTA). The NWPTA is an economic partnership between the governments of British Columbia, Alberta, Manitoba and Saskatchewan that creates an interprovincial market. To find out more, click here.
Business entities covered under the NWPTA
- Corporations (Companies)
- Limited Partnerships
- Limited Liability Partnerships
Use an Attorney
Under the NWPTA, an attorney for service must be established in order to receive notices in that province.
Supervision of Cooperatives
Amendments to The Cooperatives Act also came into force on April 8, 2020. The amendments effectively enable the transfer of Registrar of Cooperatives functions under The Cooperatives Act to consolidate functions from similar acts in one place. Functions of the Registrar that relate to the supervision over financial matters, the issuing of securities and appeals of membership terminations in a housing cooperative are transferred to a designated Superintendent of Cooperatives. The Registrar no longer needs to act as an adviser to cooperatives or provide model forms of articles and by-laws to cooperatives.
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This article represents general information and is not legal advice. Please contact us if you would like legal advice that is tailored to your particular circumstances. We would be happy to help.