Here it comes. We've been chatting with real estate agents, accountants, and tax planners about the trend of increasing transparency in the corporate law world and it's coming up soon.
Here's what the BC government intends to roll out:
- The Land Owner Transparency Act (if and when it passes) will create a public registry of the beneficial owners (or "real" property owner, not just the name registered on title) of all BC property. This will include all corporations, trusts, and partnerships disclosing the controlling shareholders, beneficial owners, and partners. If it is not disclosed, then fines could be up to $100,000 or 15% of the assessed property value. This will hopefully leave our real estate market less open to tax evasion, fraud, and money laundering. It would be the first of its kind in Canada.
- The Business Corporations Act will also see some amendments to force private companies to maintain accurate records of their true beneficial (or true) shareholders and eliminating bearer shares, which are unregistered shares owned by the certificate holder.
If and when these roll out, real estate and corporate transactions and maintenance will become more regulated and likely require must more disclosure to government agencies than ever before. We anticipate that it will be rolled out in phases, so there is time to ensure compliance but the days of easily hiding behind a numbered shell company or private corporate records are soon disappearing.
Be sure to chat with your tax advisors and corporate lawyers to discuss the intended (or unintended) consequences of these measures.