Any Ontario corporation that owns real property will need to comply with the record-keeping requirements under the Forfeited Corporate Property Act, 2015 (the “FCPA”)/OBCA. Effective December 10, 2018, all Ontario corporations will be required to maintain comprehensive registers of any ownership interests in land.
Ontario Corporations will have until December 10, 2018, to comply with the new regulation (unless the incorporation was after December 10, 2016, in which case you should already be compliant).
Records to be maintained in the register includes:
- date purchased
- date disposed
- deeds, title directions and transfers
- the municipal address;
- the registry or land titles division and the property identifier number;
- the legal description; and
- the assessment roll number.
According to the Ontario Ministry of Finance, the goal of the FCPA is to:
- mitigate risks to Ontario taxpayers that may arise when corporate property is forfeited and becomes Crown property when a company is dissolved;
- reduce the number of corporate properties that are forfeited to the Crown;
- increase corporate accountability for costs associated with forfeited corporate property; and
- increase transparency and certainty in the management and disposition of forfeited corporate property.
The FCPA also brought into force a new treatment with respect to corporate properties forfeited to the Crown and establishes new timelines within which owners can revive previously dissolved corporations and recover their assets (generally now 3 years instead of 20 years). Therefore one must be careful with the corporate revival deadlines in the FCPA/OBCA.
IMPORTANT – Penalties for failure to maintain these registers could include fines of up to $25,000.00 (for corporations) and $2,000 (for each director/officer), and possible imprisonment for up to one (1) year.
Separately from the statutory penalties described above, a non-compliant corporation could have difficulty obtaining financing. Typically, prospective borrowers must provide a representation that they are in compliance with all applicable laws. If this register is not in place then technically the corporation could not make this representation.
