Quebec: New Obligations in Terms of Corporate Transparency
Business Law Bulletin
3 minute read
As part of recent legislative changes to improve corporate transparency and reinforce the protection of the public, businesses subject to the Act respecting the legal publicity of enterprises (“LPE“) will see an increase in their disclosure obligations with the Registre des entreprises du Québec (“REQ“) as of March 31, 2023.
On June 3, 2021, in the context of combatting against fraud, tax evasion, money laundering and corruption, the Quebec National Assembly adopted the Act mainly to improve the transparency of enterprises, which amends the LPE, amongst other legislation, to improve the information available in the REQ. Accordingly, as of March 31, 2023, the date on which the relevant provisions come into effect, any business subject to the LPE will be required to disclose the additional information described below when filing its annual updating declarations with the REQ, in addition to the information currently required. This includes both businesses constituted in Quebec as well as federal, other provincial or foreign businesses registered in the REQ.
The additional information required pertains to the ultimate beneficiaries of the business, its directors and any individuals associated with the business.
The legislative amendments introduce the concept of “ultimate beneficiary”, defined as any individual who (i) holds, directly or indirectly, 25% or more of the voting rights of the business, or (ii) holds, directly or indirectly, 25% or more of the fair market value of the business, or (iii) has influence that could result in de facto control of the business.
Businesses will now be required to report certain information about their ultimate beneficiaries, namely:
- Their first and last name, as well as any other name used by the ultimate beneficiary