The Province of Ontario is introducing new corporate record-keeping requirements for all Ontario corporations having an "ownership interest" in land, effective December 10, 2016.
The new Forfeited Corporate Property Act, 2015, comes into effect that day, and includes consequential amendments to the Business Corporations Act (Ontario) which require all new Ontario corporations (and corporations continued into Ontario) to maintain a register of their "ownership interests" in land in Ontario with the corporate records already required to be kept under section 140 of the OBCA (and under the equivalent provisions of the Ontario Corporations Act, and the Not-For-Profit Corporations Act, 2010, the amendments to which may come into force later). The new section 140.1 requires each corporation to prepare and maintain at its registered office a register of its ownership interests in land which:
- identifies each property;
- shows the date of acquisition, and if applicable the date of disposition, of each property; and
- includes copies of any deeds, transfers or similar documents respecting each property that contain:
- the property's municipal address, if any;
- the land registry division for the property and its PIN;
- the property's legal description; and
- its assessment roll number, if any.
Ontario corporations already existing or continued in Ontario on December 10, 2016, have a two-year transition period to comply with section 140.1 – until December 10, 2018.
This new requirement will be onerous for Ontario corporations with multiple "ownership interests" in land. Not only will it increase the record-keeping burden, the term "ownership interests" is not defined, and the term is inconsistent with terms used in the Forfeited Corporate Property Act, 2015. We recommend that the register include all freehold, leasehold, registered and beneficial interests in Ontario real property.
The Forfeited Corporate Property Act, 2015, also changes the current law relating to the forfeiture of real and personal property on the dissolution of a corporation and the revival of dissolved corporations significantly, making corporate revival and recovery of forfeited assets more difficult. It also permits the Province to hold former officers and directors liable for expenditures it makes respecting forfeited property.
We will watch how the implementation of this legislation unfolds and will keep you up to date with new developments. We would be pleased to help you with questions you may have.