Shareholders, directors and officers beware. Recent amendments to the Ontario Business Corporations Act (“OBCA”) have added complexity to corporate record-keeping.
The amendments, which took effect in December 2016 require that, in addition to the long-standing requirement to maintain up-to-date registers of directors, officers and shareholders, corporations are now required to maintain a register of interests in real property held by them.
This applies to all corporations incorporated under the OBCA, though not to ones created under the Canada Business Corporations Act.
Whether an OBCA corporation holds one piece of property, say the location of its office, or many, for example a developer owning dozens or hundreds of lots in subdivision or condominium units, detailed records of each property must be recorded.
It is also not just outright ownership of land that must be recorded, but all ownership interests, which includes, for instance, land held in trust for a corporation and interests in co-tenancies.
While failure to maintain accurate records in a minute book may not result in direct ramifications from the provincial government, a bigger concern arising from non-compliance is where a corporation is required to make representations or warranties or give covenants to other corporations or lenders. Turning a blind eye to improper record keeping could result in a breach of a corporation’s obligations and expose it to liability.
The specific records that must be maintained are to identify each property and the date of purchase/sale, as well as the following supporting documents:
- the municipal address, if any;
- the land registry office and property identification number (PIN);
- the legal description; and
- the tax roll number, if any.
Thankfully, the province has given a transition period to get the registers set up. All OBCA corporations that were incorporated prior to December 10, 2016, will have until December 10, 2018 to prepare and insert the list into its records, in respect of real property interests held by it as of that date. Note, however, that for any corporation incorporated or continued AFTER December 10, 2016, the list must be created and in place immediately.
For more information about this or other real estate related questions, contact Mitchell Leitman at 613-232-1830.
This article is provided as an information service by Rasmussen Starr Ruddy LLP. It is distributed with the understanding that it does not constitute legal advice or establish a solicitor-client relationship by way of any information contained herein. The contents are intended for general information purposes only and under no circumstances can be relied upon for legal decision-making. Please consult with us and obtain a written opinion concerning the specifics of your particular situation.