The Quebec Government Launches a Public Consultation on Corporate Transparency
On October 3, 2019, the Quebec government launched a public consultation on new measures to strengthen corporate transparency. This consultation was announced in the government’s 2019-2020 budget and is one of the measures implemented as part of the Tax Fairness Action Plan launched in November 2017. The objective of the new measures is mainly to facilitate the fight against tax evasion.
The consultation focuses on three proposed initiatives for corporate transparency:
- Obligation of the Registraire des entreprises du Québec to disclose information on ultimate beneficiaries: it is proposed to require any entity subject to the obligation to be registered in the enterprise register (the “REQ”) to declare the information relating to its ultimate beneficiaries. In the case of a corporation, it is proposed that the ultimate beneficiaries be the individuals directly or indirectly holding more than 25% of the voting shares or all shares of the corporation measured by their fair market value. This disclosure would also apply to any individual who has de facto control of the corporation.
This proposal is a continuation of the requirement that enterprises incorporated under the Canada Business Corporations Act (the “CBCA”), since June 13, 2019, maintain a register of individuals exercising significant control. However, while conceptually similar, this proposal goes much further than the amendments to the CBCA since any person subject to the obligation to be registered in the REQ shall be required to publicly disclose information about its ultimate beneficiaries whether it is an entity governed by the laws of Quebec or by the laws of another jurisdiction.
- Allowing the search by the name of a natural person in the REQ: it is proposed to allow the public to search the REQ using the name of an individual, which is not currently possible on the public platform of the REQ. It is mentioned in the consultation document that such searches are possible in certain enterprise registers, namely in France and the United Kingdom.
- Disclosure of landowners (natural persons): it is proposed to require all landowners to declare information on ultimate beneficiaries whether by creating a new register, by amending Québec’s land register or by modifying the functions of the Registraire des entreprises du Québec.
The purpose of the consultation is to collect comments from the public and corporate stakeholders on the proposed measures and solutions. If you have or if your enterprise has any comments or concerns about the proposed changes, we invite you to contact a member of our business law group so we may discuss them as well as the best strategy for dealing with them according to the circumstances. Those who wish to submit a brief in the context of the consultation are invited to do so before December 15, 2019.
The complete consultation document, as well as the briefs that will be filed, are available by clicking here.