With a view to combating tax evasion, the Quebec government has introduced the Act to Enhance Corporate Transparency, which comes into force on March 31, 2023.
This law may entail additional obligations for your company. Our team has summarized for you the new measures introduced by the Quebec government.
Summary of main changes
Under the new legislation, businesses subject to the Act respecting the legal publicity of businesses (“businesses”) will be required to transmit additional information to the Registraire des entreprises (“REQ”). The information available to the public will also be enhanced.
In particular, these new obligations affect your company if it is a corporation, partnership or business trust required to be registered with the REQ. It also affects voluntarily registered entities.
Registered companies will have until the end of their annual filing period to comply. Unregistered companies will have to do so when they register.
Declaration of ultimate beneficiaries
Companies will now have to identify their “ultimate beneficiaries” and disclose information about them to REQ. The information to be disclosed will include their name, place of residence, date of birth, type of control exercised by them or percentage of shares or units held. However, their date of birth will not be available to the public.
The concept of “ultimate beneficiary” is intended to target individuals holding a “right to benefit from part of the income or assets of an enterprise, or a right to direct or influence the activities of such an enterprise”. It includes, among others :
- direct or indirect holders and beneficiaries of shares or units conferring at least 25% of voting rights or having a value corresponding to at least 25% of the company;
- individuals running a sole proprietorship;
- persons with de facto control of a company;
- the general partners of a limited partnership;
- trust trustees and certain beneficiaries.
An in-depth analysis may need to be carried out to identify all the ultimate beneficiaries, as other people are also covered by this concept. Our staff will be happy to help you.
It should be noted that certain companies will be exempt from this obligation, such as non-profit private legal entities, public legal entities and financial institutions.
Sending a copy of identity papers
Companies will be required to provide a copy of a valid ID for each current director declared to REQ. This document will not be published.
Declaration of date of birth
Companies must provide the date of birth of all individuals registered with the REQ. However, this information will not be available to the public.
Declaration of a business address
In addition to having to declare the home address of a natural person listed in the REQ, it will be possible to add a business address for this person, so that only this address can be consulted in the REQ by the public.
Search by name of an individual
The REQ search tool will also be optimized as of March 31, 2024, so that the name of an individual can be used as the basis for a REQ search, including for the public.
Don’t hesitate to contact a member of our team if you’d like to know more about corporate transparency and this new law. Our staff can help you meet these new obligations.
