On December 10, 2016, certain provisions of Bill 144, the Budget Measures Act, 2015 (“Bill 144”), which enacted the Forfeited Corporate Property Act, 2015 (“FCPA”) and the Escheats Act, 2015 (“EA”), came into force creating new record keeping obligations for Ontario corporations.
In this regard, while Bill 144 not only addressed situations where corporations, including charities and not-for-profits, dissolve without having properly disposed of all of their assets, but new recordkeeping obligations for both new and existing Ontario corporations were also introduced by way of amendments to the Ontario Business Corporations Act (“OBCA”), the Ontario Corporations Act (“OCA”), and the Ontario Not-for-profit Corporations Act (when it comes into force). These amendments provide that Ontario corporations are now required to maintain a register of ownership interests in land in Ontario at its registered office. This includes:
- The identity of each property in Ontario in which the corporation possesses an “ownership interest”;
- The date on which the corporation acquired the property and, if applicable, the date on which it disposed of it; and
- A copy of any deed, transfers or similar documents that contain the municipal address, the registry or land titles division and the property identifier number, the legal description, and the assessment roll number of each property listed on the register, if any.
“Ownership interest” is an undefined term thereby implying that these measures could extend to both legal and beneficial ownership in real property. These may also include where the corporation has an interest in property by way of lease or other arrangement. These requirements are unique to Ontario, as currently other jurisdictions in Canada in which charities and not-for-profits might incorporate are not required to maintain such registers. While for some corporations the creation and maintenance of such registers will likely be straightforward, it is anticipated that corporations with a history in the province will need time and effort in order to review all prior documentation dealing with its ownership interests in land.
Corporations incorporated after December 10, 2016 must comply with the new recordkeeping requirements immediately. For corporations that were incorporated prior to December 10, 2016, they will have two years, i.e., until December 10, 2018, to comply with the new requirements.
As both the FCPA the EA and the corresponding amendments to other acts may have application to incorporated charities and not-for-profit corporations in Ontario, it will be important for these corporations to consult with their legal counsel to determine the impact of these new acts and recordkeeping requirements.
For more information on the changes under the FCPA and the EA see the January 2016 edition of our Charity & NFP Law Update.