Comparing Canada's New Ultimate Benefit Ownership Framework with EU and US Rules

Canada’s new Bill C-86 Budget Implementation Act, 2018 No.2 rules come into full force this coming June. The updated rules require certain financial and other transactional organizations to be subject to mandatory Ultimate Beneficial Ownership (UBO) disclosure requirements, which means they need to update their entity management workflows.

Disclosure requirements are part of a global trend towards corporate transparency, but specific requirements vary between jurisdictions. Due to these new regulations, we thought it would be interesting to compare the Canadian UBO disclosure requirements with those of the European Union and the United States.

What are the thresholds for Ultimate Beneficial Ownership?

Ultimate Beneficial Ownership identification requirements are based on the ownership and/or control of an entity.

What are the Ultimate Beneficial Ownership identification requirements in corporate records?

Where the thresholds have been met, covered organizations must identify and verify certain information relating to the UBOs. The information that must be gathered will vary by jurisdiction, and these will become required fields within Athennian’s entity management software.

Who can access the Ultimate Beneficial Ownership information?

Those with permissions to access the Ultimate Beneficial Ownership information vary between the three different jurisdictions.

What are the Ultimate Beneficial Ownership compliance penalties?

The penalties for non-compliance with Ultimate Beneficial Ownership requirements also vary between these three jurisdictions.

The new Ultimate Beneficial Ownership rules

The update to Bill C-86 passed on December 13, 2018, aims to modernize laws relating to taxation and consumer protection. This overhaul updates the identification and treatment of Ultimate Beneficial Ownership, the rules relating to the disclosure of persons or entities who are the true owner of Canadian securities.

These updates specifically address federally registered private corporations under the Canada Business Corporations Act. While publicly traded companies are exempt, provincially registered companies may still be required to collect UBO information in order to comply with anti-money laundering rules imposed on financial services firms.

Updating entity management workflows

UBO regulations are part of a move towards greater transparency for corporate entities and will assist in global efforts to combat money laundering. For law firms, entity management organizations, and financial services firms, the increased regulatory disclosure requirements for UBOs mean that entity-management workflows must be updated to meet the recordkeeping requirements in each jurisdiction.

With Athennian’s cloud-based entity-management software, your organization will be ready to adapt. Find out how Athennian meets Ultimate Beneficial Ownership regulations and can help you and your company prepare for the changes.

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Not Legal Advice. Paper Interactive, Inc. is not a law firm and does not provide legal advice. Any content contained on this website is for general information purposes only and does not constitute legal or professional advice of any kind. For advice regarding how Bill C-86 may apply to your situation, please contact a qualified lawyer in your jurisdiction.

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