Are you an Ontario corporation with an ownership interest in land in Ontario? The deadline to create a corporate land ownership register is approaching

Are you an Ontario corporation with an ownership interest in land in Ontario? The deadline to create a corporate land ownership register is approaching

By December 10, 2018, every corporation (collectively, the "Ontario Corporations") incorporated under the Business Corporations Act (Ontario) ("OBCA") and the Corporations Act ("OCA") must be in compliance with the new land ownership record-keeping requirements which were introduced in 2016.

Who does this concern?

The new record-keeping requirements impact Ontario Corporations that have ownership interests in land in Ontario. The Ontario Corporations incorporated after December 10, 2016 are already required to comply, while the Ontario Corporations incorporated before December 10, 2016 are required to comply by December 10, 2018.

What are the new record-keeping requirements?

Each Ontario Corporation must prepare and maintain a register of all of its “ownership interests in land” at its registered office or at such place in Ontario designated by its directors. Given the definition of ownership does not contain any restrictions or qualifications, the register must presumably contain both registered and unregistered beneficial interests in land.

What must be included in the register?

The register must identify: (i) each property owned by the corporation; (ii) the date the corporation acquired the property; and (iii) the date the corporation disposed of the property. Additionally, where available, the corporation must keep certain supporting documents with the register including deeds, transfers, or similar documents that contain any of the following information regarding the property:

1. the municipal address, if any;
2. the registry or land titles division and the property identifier number;
3. the legal description; and
4. the assessment roll number, if any.

What is the intention behind the new record-keeping requirements?

The register is intended to provide a clear picture of the status of the corporation’s ownership interests in land. Additional amendments to the OBCA and OCA, which are to come into force at a later date, introduce a requirement that, in the event the corporation is seeking to dissolve, the corporation must state that it is no longer a registered owner of land in Ontario. By requiring corporations to maintain a property register, it will be easier for the government to learn whether or not the corporation is in fact a registered owner of land at dissolution and if so, to refuse to allow the dissolution and thereby prevent the land from escheating to the Crown (i.e. forfeited to the province).

What are the consequences for failure to comply?

This requirement may, in some cases, present a significant administrative burden for the corporation as the register must be continually updated and maintained. However, failure to maintain the register without reasonable cause is an offence under both Acts which may attract a fine against the corporation (up to $25,000) as well the directors and/or officers (up to $2000 each) who may also be subject to imprisonment for up to one year.