New Record-Keeping requirements for Corporations – Ownership Interest in Real Property (Changes to Ontario Business Corporations Act)Indu
On December 10, 2016, amendments to the Ontario Business Corporations Act (the “OBCA”) fame into effect that require all corporations incorporated under the OBCA to comply with the new record-keeping requirements with respect to its ownership interests in real property in Ontario.
Seemingly, the amendments do not specify that this only applies to registered interests and therefore the amendments will be applicable to registered and beneficial interests of the Corporations in real property. Ontario Corporations who hold a beneficial interest in real property pursuant to a joint tenancy or joint ownership agreement, or who appoint a trustee corporation to hold legal title to real property, will take notice of these new requirements and obtain a copy of the required documents from the Director, Officer or trustee corporation, even though the registered holder is not incorporated under the OBCA.
Unambiguously, Corporations that hold an interest in real property located in Ontario are required to maintain a register of all real property in which they have an ownership interest in compliance with Section 140.01 of the OBCA. The OBCA requires the following:
- The register be located at the Corporation’s registered head office;
- Identify each property that the Corporation has ownership interest in;
- The date the Corporation acquired the property;
- The date the Corporation disposed of the property, if applicable.
Additionally, the Corporation must keep with the register a copy of any deeds, transfers and other similar documents that contain any of the following with respect to each property noted in the Register:
- The Municipal address, if any;
- The Registry or Land Titles Division and the Property Identification Number;
- The Legal Description;
- The Assessment Role Number, if any
Time limit: (a) Corporations incorporated or continued under the OBCA prior to December 10, 2016 will be given a two-year transition period and must comply with the provisions as of December 10, 2018.
(b) A Corporation incorporated or continued under the OBCA on or after December 10, 2016 must immediately comply with these new provisions.
(c) For Ontario Corporations with interests in many properties, it is highly advisable that they start the process of collecting the required information and documents now to ensure they are in compliance by the deadline, December 10, 2018.
Penalty: Corporations who fail to comply with these requirements may subject to a fine of not more than $25,000. If a Corporation if found guilty, every director or officer who authorized, permitted, or acquiesced the offence is also liable to a fine of not more than $2,000 and/or imprisonment for a term of not more than 1 year.
This article provides information of a general nature only. It does not provide any legal advice nor can it or should it be relied upon. If you have any specific legal questions please contact our office and speak to one of the members of our Business Law Practice Group.