What Is Corporate Transparency?
Corporate transparency refers to legal obligations that require companies to disclose and maintain information about the people who own or control them. These rules are designed to:
- Combat money laundering and tax evasion
- Prevent the use of corporations for illicit purposes
- Increase public confidence in the corporate system
In Canada, the move toward increased transparency has led to specific recordkeeping requirements focused on identifying ISCs.
Who Qualifies as an Individual with Significant Control (ISC)?
Generally speaking, anyone who meets any of the following thresholds may be considered to be an ISC:
- Registered owner, beneficial owner or has control over (directly or indirectly) 25% or more of the corporation’s voting shares or total share value
- Exerts significant influence over corporate decisions (such as the right or ability to effect a change in the board of directors), even without formal ownership
- Is part of a group of individuals that jointly meets any of the above thresholds
This includes beneficial owners, voting control holders, and sometimes even non-shareholders who influence governance decisions.
What Does the Law Require?
In Ontario, corporations must maintain a register containing the following information for each ISC:
- Full legal name
- Date of birth
- Last known address
- Jurisdiction for tax purposes
- Date when the individual became or ceased to be an ISC
- A description of how the individual qualifies as an ISC
- A description of the steps taken to verify the information
Some Ontario corporations are not required to comply with this obligation because their ISC information is already accessible elsewhere (e.g., under securities laws), or because they are fully owned by the Canadian government. But generally speaking, all private companies would be required to comply.
No information from the ISC register of an Ontario corporation is publicly accessible. Access is limited to specific authorities, including law enforcement, tax authorities, and certain regulatory bodies, for investigative and enforcement purposes.
However, as has always been the case, the names and addresses for service of an Ontario corporation’s directors and officers, along with the dates they assumed their roles, are publicly available.
Corporations are obligated to take reasonable steps to ensure the accuracy and completeness of their ISC register. Penalties for non-compliance can include fines of up to $200,000 or imprisonment for up to six months for directors, officers, or shareholders who knowingly contravene the requirements.
Why This Matters for Business Owners
Many entrepreneurs assume that once they incorporate, their corporate structure is private—but these rules create an obligation to identify who really controls the company. This is especially relevant for:
- Closely held corporations with multiple investors or co-founders
- Holding companies or layered corporate structures
- Family-run businesses where control is shared across individuals
Even if your company only has one shareholder or director, you are still required to maintain an ISC register showing that control.
Final Thoughts
Corporate transparency is no longer optional—it’s a legal requirement in Canada. Keeping clear records of who exercises significant control over your corporation is essential for compliance and for protecting your business from regulatory risk.
SkyLaunch’s Complete Compliance Plan includes an ISC register which meets the requirements under Ontario law and can be accessed as part of your corporation’s online minute book.
