Business owners are familiar with the requirements for a corporation to prepare and maintain corporate books and records. However, corporations incorporated or continued under the Business Corporations Act of Ontario (“OBCA”) now need to be aware of the new onerous amendments to the OBCA which came into force on December 10, 2016.
The new Section 140.1 of the OBCA now requires corporations to maintain an updated register of the corporation’s ownership interest in land in Ontario at its registered office.
The register should first identify each instance of “ownership interest” in Land in Ontario and also show the date on which the corporation acquired the land and, if applicable, the date on which the corporation disposed of it.
The corporation must also keep evidence to substantiate the register by keeping a copy of any deeds, transfers or similar documents that contain the following with respect to each property listed in the register:
1. the municipal address, if any;
2. the Registry or Land Titles Division and the Property Identifier Number (PIN);
3. the legal description; and
4. the assessment roll number, if assigned.
It is important to note, however, that “ownership interest” is not defined. This requirement may therefore extend to both legal and beneficial ownership in real property. In addition, a corporation holding a charge or mortgage, options to purchase, easement, and right-of-way interests, and possibly leasehold interests over land in Ontario may also be required to list the lands in its register.
The new Section 140.1 of the OBCA places extensive onus on directors and officers of a corporation to maintain a real property register where the corporation has an ownership interest in real property. This requires significant efforts for corporations to establish new procedures to ensure ongoing compliance. There may also be third party agreements such as loan, and sale and purchase agreements, which will require parties to be in compliance with all applicable laws. Thus, if the register is not maintained, the corporation's inability to make these representations could jeopardize the desired transactions.
Finally, non-compliance may result in fines being charged against the corporation and its directors and officers. It is therefore important for corporate owners to discuss these obligations with their advisors to avoid negligence or costly oversight. If you require assistance with compliance, please contact JDC Law!