CORPORATE LAND OWNERSHIP RECORD TIGHTENING UNDER THE OBCA
OCTOBER 2017 | AUTHOR: SUZANNA WINSBOROOUGH
s a result of the Budget Measures Act, 2015, which was passed on December 10th, 2015, the record keeping requirements of the Ontario Business Corporations Act, 1990 (the "OBCA") have been amended to require Ontario Corporations to prepare and maintain a register of their ownership interests in land in Ontario. The intention of these amendments is primarily for the province to locate the assets of dissolved corporations, in turn enabling them to use or sell any forfeited corporate property.
Outline of Changes: Record Requirements
Section 140.1 (2) of the OBCA requires an Ontario Corporation to identify each Ontario property owned by it, and show the date the corporation acquired the property, and if applicable, the date the corporation disposed of it.
Beyond these requirements, the corporation is instructed to include in these records a copy of any deeds, transfers, or similar documents that contain any of the following with respect to each property listed in the register:
The corporation is required to maintain these records at its registered office, or at such other place in Ontario designated by the directors, for instance at a law firm or an accountants office, where the corporate minute book is maintained.
The deadline for the preparation of these records is outlined in Section 140 (4) and Section 140 (5) of the OBCA. This provides that a corporation that is incorporated prior to December 10, 2016 has until December 10, 2018 to prepare and maintain these records in compliance with the Act. A corporation that is incorporated after December 10, 2016 will be required on the day of its incorporation to prepare and maintain these records.
Impact of Changes: Potential Challenges
The OBCA fails to accurately define the term 'ownership interest in land' and therefore it is unclear as to whether this definition is limited to registered interests in land or whether it also includes beneficial interests as well. The prudent corporation would pay heed to the general interpretation that this definition is intended to include both registered and beneficial interests in land. This complicates the procedure as it places a heavier burden on corporations to include land that is held in trust with the corporation as the beneficial owner, as well as corporations which hold an equitable mortgage, leasehold interest or easement over land.
These changes are at the expense of any corporation which has extensive real estate holdings, specifically developers or any corporation which handles the acquisition and disposition of property as a tool for accumulating a return on investment. These new changes will place a burden on any Ontario corporation which operates in this arena, requiring them to prepare and maintain records of their continually shifting property portfolio.
As previously mentioned, the OBCA permits corporations to maintain all of their records, including those outlining ownership interests in land, at their own registered office or at an office in Ontario designated by the directors, such as that of a law firm. These changes will require increased communication, and transfer of information, between the corporation and the holder of their corporate records.
Given these changes, it is important for corporations incorporated before December 10, 2016 to prepare and maintain these records by December 10, 2018. Any corporations which are presently being incorporated, or are planning to be incorporated in the future will need to anticipate the preparation of these records in order to comply with this legislation.
If you have any questions or concerns regarding this legislation please contact a member of our business services group.
By Suzanna Winsborough and Oliver De Guerre
Outline of Changes: Record Requirements
Section 140.1 (2) of the OBCA requires an Ontario Corporation to identify each Ontario property owned by it, and show the date the corporation acquired the property, and if applicable, the date the corporation disposed of it.
Beyond these requirements, the corporation is instructed to include in these records a copy of any deeds, transfers, or similar documents that contain any of the following with respect to each property listed in the register:
- The municipal address, if any
- The registry or land titles division and the property identifier number
- The legal description
- The assessment roll number, if any
The corporation is required to maintain these records at its registered office, or at such other place in Ontario designated by the directors, for instance at a law firm or an accountants office, where the corporate minute book is maintained.
The deadline for the preparation of these records is outlined in Section 140 (4) and Section 140 (5) of the OBCA. This provides that a corporation that is incorporated prior to December 10, 2016 has until December 10, 2018 to prepare and maintain these records in compliance with the Act. A corporation that is incorporated after December 10, 2016 will be required on the day of its incorporation to prepare and maintain these records.
Impact of Changes: Potential Challenges
The OBCA fails to accurately define the term 'ownership interest in land' and therefore it is unclear as to whether this definition is limited to registered interests in land or whether it also includes beneficial interests as well. The prudent corporation would pay heed to the general interpretation that this definition is intended to include both registered and beneficial interests in land. This complicates the procedure as it places a heavier burden on corporations to include land that is held in trust with the corporation as the beneficial owner, as well as corporations which hold an equitable mortgage, leasehold interest or easement over land.
These changes are at the expense of any corporation which has extensive real estate holdings, specifically developers or any corporation which handles the acquisition and disposition of property as a tool for accumulating a return on investment. These new changes will place a burden on any Ontario corporation which operates in this arena, requiring them to prepare and maintain records of their continually shifting property portfolio.
As previously mentioned, the OBCA permits corporations to maintain all of their records, including those outlining ownership interests in land, at their own registered office or at an office in Ontario designated by the directors, such as that of a law firm. These changes will require increased communication, and transfer of information, between the corporation and the holder of their corporate records.
Given these changes, it is important for corporations incorporated before December 10, 2016 to prepare and maintain these records by December 10, 2018. Any corporations which are presently being incorporated, or are planning to be incorporated in the future will need to anticipate the preparation of these records in order to comply with this legislation.
If you have any questions or concerns regarding this legislation please contact a member of our business services group.
By Suzanna Winsborough and Oliver De Guerre
This article is provided for general information purposes and should not be considered a legal opinion. Clients are advised to obtain legal advice on their specific situations.
