The Ontario Business Corporations Act now requires all Ontario corporations holding ownership interests in land in Ontario to maintain a register of their ownership interests at their registered offices. Ontario corporations incorporated or continued into Ontario after December 10, 2016, had to comply immediately, but existing corporations were given a two-year period to prepare their registers. That period expires on December 10, 2018.
There are two main questions to consider: (1) what interests in land is the OBCA referring to when it refers to an “ownership interest in land,” and (2) where should the register be kept?
Given the lack of guidance around the definition of “ownership interest in land”, the prudent approach would be to maintain a register of both registered and beneficial titles to real property.
Often a corporation’s registered address differs from its operating address (for example, the corporation’s law firm may act as registered office and maintain the corporation’s minute books). Where the registered office differs from the operating office the corporation will need to arrange to have the register available and maintained at the registered office.
The ownership interests register, which may be in paper or electronic form, must identify each property and set out its date of acquisition and, if applicable, its date of disposition, and is to be supplemented by documentation such as transfer/deeds which contain the following information for that property:
- its municipal address, if any;
- the Land Registry Office division in which the property is located and its identifier number; and
- its legal description, andits assessment roll number, if any.
Usually the document conveying the interest will contain the necessary information, and since there is no requirement that the register and associated documents be in hard copy, a link to the supporting document in an electronic register should suffice. Where a large number of properties are involved, maintaining an electronic register with links to underlying documents may be the only practical way to comply.
Failure to comply with the OBCA is an offence under the statute for which individual officers and directors could be liable for fines (up to $2,000) and jail time (up to one year) and for which the corporation could be liable for fines up to $25,000.