Register of individuals with significant control (ISC)

Who counts as an individual with significant control

An individual with significant control (ISC) is a natural person, never a corporation, who sits at the end of the ownership chain or who controls the corporation in practice. The register exists to show who really stands behind a private corporation, even when shares are held through holding companies, trusts or nominees.

• Direct or indirect holding: shares held personally, through a holding company or through a trust all count toward the threshold.
• Acting together: under the federal rules and similar provincial ones, individuals who hold shares jointly or under an agreement to exercise their rights together can each be an ISC, even if none of them crosses the threshold alone.
• Control in fact: a person who can direct the corporation's decisions, for example through a shareholder agreement, financing terms or family ties, can be an ISC without holding any share.
• More than one, or none: a corporation can have several ISCs. When no one meets the definition, the register records that fact and the steps taken to check it.

A few common cases show how the test works. Two founders who each hold half of the voting shares are both ISCs. A founder who holds all the shares of a holding company, which in turn holds a majority of the operating corporation, is an ISC of the operating corporation. A parent who holds no shares but who, under a shareholder agreement, appoints the majority of the board can be one too. An employee holding a small block of options generally is not, until the options are exercised and the threshold is reached.

Applying these rules to a structure with several holding companies, trusts or a shareholder agreement takes judgment. Incorpo's questionnaire asks the questions the register needs, but deciding whether a particular person is an ISC in a complex structure is a question for a lawyer.

What the individuals with significant control register must contain

The register is a corporate record, kept with the minute bookminute bookOfficial record holding a corporation’s articles, by-laws, resolutions and registers.See definition → at the registered office or another place the statute allows. For a federal corporation, it generally contains, for each ISC:

• full name, date of birth and latest known address;
• jurisdiction of residence for tax purposes;
• the date the person became an ISC and, later, the date they ceased to be one;
• a description of how the person is an ISC: shares held, rights, control in fact;
• a description of the steps the corporation took during each financial year to identify its ISCs and keep the register up to date.

The register is not a one-time document. It is updated when the corporation learns of a change (a share transfer, a new shareholder agreement, a change of address) and reviewed at least once a year. Most provinces now require a similar register, with differences in content, location and access.

The corporation cannot always obtain everything it needs on its own. Shareholders are expected to answer its requests for information to the best of their knowledge, and the register records the steps taken when information is missing or unconfirmed. Keeping a dated trace of those requests is part of showing that the register was kept properly.

The rules for Alberta, the Northwest Territories and Nunavut are being verified and are not shown here yet.

Filing with the registry (federal, Quebec)

In most provinces, the register stays inside the corporation and is shown to authorities only on request. Two regimes go further and require the information to be filed with the registry itself: the federal one and Quebec's.

Quebec's obligation applies to enterprises registered in Quebec, including federal corporations and corporations from other provinces that do business there. A federal corporation active in Quebec can therefore file ISC information with Corporations Canada and declare its ultimate beneficiaries to the Registraire des entreprises; the two definitions are close but not identical.

Elsewhere, the register is kept but not filed. Ontario: No filing: kept at the registered or head office since 2023-01-01, provided on request to authoritiessource. British Columbia: No: kept at the company's records officesource. Prince Edward Island takes its own approach: Shareholder information filed in the OCBR (since Sept. 1, 2020)source.

Protecting personal information

The register contains sensitive personal information: dates of birth, home addresses and tax residence. Access depends on the jurisdiction, and the rules have changed several times since federal registers became mandatory.

• Federal: information made public by Corporations Canada: Name, residential address or address for service, start/end dates, description of controlsource.
• Quebec: Partly public: name, dates, address, condition and percentage; date of birth not publicsource.
• Ontario: Not public; disclosed on request to law enforcement, tax and regulatory authoritiessource.
• British Columbia: Not publicsource.
• Nova Scotia: Not public: access for shareholders and creditors (by affidavit) and investigative bodiessource.
• Newfoundland and Labrador: Not public; shareholders and creditors on affidavitsource.

Inside the corporation, the register is personal information like any other. Privacy laws, including PIPEDA and, in Quebec, Law 25, expect it to be kept securely, accessed only by the people who need it and not used for unrelated purposes. Only the information the statute requires belongs in it.

Outside the corporation, access to a register kept internally is limited. Depending on the statute, shareholders and creditors can consult it under conditions, often by sworn statement, and police, tax and regulatory authorities can obtain a copy on request. Nova Scotia and Newfoundland and Labrador, listed above, illustrate that model.

In Incorpo's digital minute book, the register sits with the other corporate records, accessible to the users you authorize on the account. The questionnaire collects only the fields the register needs, and each change is dated so the annual review can show what was checked and when.