On June 8, 2021, Bill 78 (An Act primarily to improve the transparency of enterprises) was assented to by the Quebec National Assembly. The effective date of these amendments is March 31, 2023. This Act amends the Act respecting the legal publicity of enterprises (the "LPLE") and will have a significant impact on the obligations of Quebec businesses. These new legislative measures are intended to increase the accessibility and effectiveness of the data in the register with a view to improving transparency, protecting the public and combating tax evasion.
Currently, businesses are required to register and declare certain information to the Quebec Enterprise Registrar in accordance with the LPLE. The declared information is then made available to all citizens, and can be consulted free of charge directly on the Quebec Business Registry site.
The amendments to the EIPA, once in force, will require companies to report additional information regarding the identity of the "ultimate beneficiary". The concept of "ultimate beneficiary" will be introduced into the EIPA, as defined in its new section 0.4 :
" 0.4. In this Act, a natural person who meets either of the following conditions is considered to be an ultimate beneficiary of a taxable person:
(1) it holds, even indirectly, or is the beneficiary of a number of shares or units of the registrant that entitles it to exercise 25% or more of the voting rights attached thereto;
(2) it holds, even indirectly, or is the beneficiary of a number of shares, units or units with a value equal to 25% or more of the fair market value of all the shares, units or units issued by the registrant;
(3) it has such direct or indirect influence that, if exercised, would result in de facto control of the taxpayer;
(4) is the general partner of the registrant or, if a general partner of the registrant is not a natural person, meets one of the conditions referred to in paragraphs 1 and 3 or is a party to an agreement referred to in the second paragraph in respect of that general partner;
(5) it is the trustee of the corporation. Where natural persons who hold, even indirectly, or are beneficiaries of shares, units or interests in the registrant have agreed to exercise jointly the voting rights attached to those shares, units or interests and the effect of that agreement is to give them together the power to exercise 25% or more of those rights, each of them is considered to be an ultimate beneficiary of the registrant.
In the case of a taxable person who is a natural person operating a sole proprietorship, the sole proprietorship is presumed to be the sole ultimate beneficiary, unless the taxable person declares otherwise."
Section 0.4 specifies that reference must be made to sections 21.25 and 21.25.1 of the Taxation Act to determine whether there is "influence" within the meaning of subsection (3).
In order to comply with the new requirements of the LPLE, companies will have to declare the name of the ultimate beneficiary, his or her domicile, the date on which a natural person became an ultimate beneficiary and the date on which he or she ceased to be an ultimate beneficiary, as well as the type of control exercised by the ultimate beneficiary or the percentage of shares or units he or she holds or of which he or she is a beneficiary (art. 33, paragraph 2, subparagraphs 2.1° and 2.2°). This information will be available on the register of companies. Certain enterprises will be exempted from this obligation, in particular non-profit legal persons under private law, legal persons under public law and reporting issuers within the meaning of the Securities Act.
In addition, the date of birth of all natural persons registered in the register must also be declared, including that of the ultimate beneficiaries (art. 33, paragraph 1). It is important to note, however, that this information will not be publicly available. In addition, once the bill comes into force, directors will be able to declare a business address, so as not to have to publicly disclose their personal address. In addition, directors will be required to provide valid identification issued by a government authority to support any declaration or update of their information.
Finally, it is currently possible for the public to search the Business Registry site using a business name or number. The legislative amendments provide for the addition of a new functionality to the Business Register site. As of March 31, 2024, a search using the first and last name of an individual will be permitted.
To file a declaration of update using our services, click on the following link: https://incorporationquebec.net/mise-a-jour/