In Québec, subject entities are required to declare their ultimate beneficiaries to the REQ, rather than maintain a register per se . The requirement to declare ultimate beneficiaries applies to all entities that carry on business in Québec, including corporations, partnerships and trusts, regardless of their jurisdiction of formation (in contrast, the CBCA and other provincial corporate statutes, including the OBCA, require only corporate entities to maintain a register). Ultimate beneficiaries are individuals holding or controlling, directly or indirectly, 25% or more of the voting shares or units, or 25% or more of the fair market value, of all the shares or units issued by the entity. Individuals who have any direct or indirect influence that if exercised would result in control in fact of an entity are also ultimate beneficiaries. For each ultimate beneficiary, as well as for certain other individuals associated with the registrant (such as the registrant’s directors, officers and shareholders), the registrant must disclose to the REQ certain information, including their names, domiciles, dates of birth and addresses. This information is publicly accessible, except that birth dates and, in cases where a professional address is provided in addition to a residential address, residential addresses are not available to the public. Corporations must also file with the REQ a copy of a valid identification document for each of their directors. The identification documents are destroyed by the REQ in accordance with Québec law once they are processed. Regulations requiring CBCA corporations to disclose their registers to the federal corporate regulator annually and making such registers publicly accessible are in an advanced stage but are not yet in force. Such requirements are similarly not yet in effect under the OBCA, nor in some other provinces. In addition, tax, police and similar authorities may request access to the registers in connection with an investigation.
Branch An unincorporated branch may be chosen as an alternative to a subsidiary. A foreign corporation must register in all provinces in which it wishes to carry on business. A foreign corporation cannot register if its name is the same as or similar to one already in use in that province. In addition, in Québec the foreign corporation must register a French name. Business names used by a branch should also be registered and should not be the same as or similar to names used in the province. A foreign corporation that establishes a branch in Ontario must obtain a licence under the Extra-Provincial Corporations Act (or, in the case of an LLC, register its name under the Business Names Act ), although this is generally a routine matter. Transparency Disclosure Requirements Consistent with the initiatives undertaken by other members of the Organisation for Economic Co- operation and Development (OECD) to combat money laundering and other financial crimes, private corporations in most Canadian jurisdictions, including CBCA and OBCA corporations, are required to maintain a register of individuals who have a significant interest in the corporation. Generally, such a register must record individuals who hold, or directly or indirectly control, shares accounting for 25% or more of the voting rights or fair market value of the corporation’s shares (including beneficial owners if they are different from the registered owners of the shares, and individuals exercising direction or influence over such shares). Wholly owned subsidiaries of public companies, and certain other entities, are exempt from this requirement.
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Doing Business in Canada
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