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Impact of transparency register requirements on financial sponsors

Author(s): Alex Gorka, Hugo-Pierre Gagnon, Mike Proudfoot, Trevor R. Scott, Kai Sheffield, Aliza Zigler

Dec 11, 2023

In recent years, new requirements for private companies to disclose corporate ownership information have proliferated across Canada. All Canadian jurisdictions apart from Alberta, Yukon, the Northwest Territories and Nunavut have now adopted legislation requiring this disclosure, which is often referred to as a “transparency register.” The goal of these registers is to increase corporate transparency and accountability by providing information regarding individuals with significant control (ISC), which generally refers to individuals that have a 25% or greater interest in the corporation. These new requirements are often unclear in their application to complex ownership structures and create significant compliance burdens for private equity and venture capital firms (financial sponsors).

In most Canadian jurisdictions, these registers are not currently publicly available. In many of these same jurisdictions, however, they can be accessed by bodies such as police forces, governmental tax entities or regulators. Key differences are emerging as several legislative regimes, including at the federal level and in Québec and British Columbia, are moving towards creating registers with greater public access. Federally, proposed legislation would, if enacted, impose the steepest fines in Canada for contraventions of the rules related to transparency registers...

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