Beneficial ownership requirements

May 2018 

Beneficial ownership requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations

*Please note that this guidance has been re-issued by FINTRAC and differs from the guidance on this subject published in June 2017. Previously, FINTRAC took the position that while various means could be used to obtain beneficial ownership information, only official documentation could be relied upon to confirm the accuracy of the information obtained. This guidance has been updated to reflect FINTRAC's amended position that, once the beneficial ownership information is obtained, various reasonable measures may now be used to confirm the accuracy of beneficial ownership information. These changes have been in effect since May 1, 2018.

May 1, 2018

Financial entities, securities dealers, life insurance and money services businesses have obligations related to beneficial ownership only when they have to confirm the existence of an entity. These obligations include:

  • obtaining information that describes the ownership, control and structure of the entity, including corporations and trusts; and
    • if the entity is a corporation, obtaining the names of all the directors, as well as the names and addresses of the beneficial owners;
    • if the entity is a trust, obtaining the names and addresses of all trustees and known beneficiaries and settlors of the trust;
    • if the entity is other than a corporation or trust, obtaining the names and addresses of the beneficial owners; and
  • taking reasonable measures to confirm the accuracy of the information obtained, and keeping records of the information obtained and the measures taken to confirm its accuracy.

If an entity is a not-for-profit organization, you must also determine if the entity is a registered charity under the Income Tax Act or if it is an unregistered not-for-profit organization that solicits charitable donations from the public.

Who are beneficial owners?

Beneficial owners are the actual individuals who are the trustees, and known beneficiaries and settlors of a trust, or who directly or indirectly own or control 25% or more of a corporation or an entity other than a corporation or trust, such as a partnership. The ultimate beneficial owners cannot be another corporation or entity; they must be the actual individuals who are the owners or controllers of the entity. In order to determine who the beneficial owners are, you must search through as many levels of information as necessary in order to determine the actual individuals.

It is important to consider that the names found on legal documentation may not be the actual owners of an entity. For example, you may become aware through the normal course of business that the legal owners of a corporation, entity or trust, may not be the actual individuals who own or control the corporation, entity or trust.

Why is identifying beneficial ownership important?

Identifying beneficial ownership is important in order to remove anonymity and identify the actual individuals behind the transactions and account activities, which is a key component of Canada's anti-money laundering and anti-terrorist financing regime. The concealment of the beneficial ownership information of accounts, businesses and transactions is a technique used in money laundering and terrorist activity financing schemes. Collection and confirmation of this information is an important step to aid in money laundering and terrorist activity financing investigations and ultimately protect the integrity of Canada's financial system.

How do I obtain information about the beneficial owners?

To obtain beneficial ownership information, as well as the ownership, control and structure information, you can have the entity provide it, either verbally or in writing.

For example:

  • the entity can provide you with official documentation;
  • the entity can tell you the beneficial ownership information and you can write it down for record-keeping purposes; or
  • the entity can fill out a document to provide you with the information.

In all cases it is information on the actual individuals who are the beneficial owners as well as information establishing the entity's ownership, control, and structure that must be obtained.

How do I confirm the accuracy of the information about the beneficial owners?

Reasonable measures must be taken to confirm the accuracy of the information obtained. This can include referring to official documentation or records.

It is also acceptable to have the client sign a document to confirm the veracity of the beneficial ownership information, as well as ownership, control and structure information obtained. In this case, it is possible for one document to be used to satisfy the two distinct steps, namely to obtain the information and to confirm the accuracy of it.

If referring to documents or records, the accuracy of the beneficial ownership, as well as ownership, control and structure information related to a corporation or entity may be confirmed by referring to records, such as the:

  • minute book;
  • securities register;
  • shareholders register;
  • articles of incorporation;
  • annual returns; 
  • certificate of corporate status;
  • shareholder agreements;
  • partnership agreements; or
  • board of director's meeting records of decisions.

In the case of a trust, the accuracy of the information can be confirmed by reviewing the trust deed, which will provide information on the ownership, control and structure of the trust.

Other reasonable measures can include:

  • asking the client to provide supporting official documentation;
  • conducting an open-source search; or
  • consulting commercially available information.

In either case, you must collect documents or information that provides details of the beneficial owners as well as the ownership, control and structure.

To confirm the information obtained about a registered not-for-profit organization, you can consult the charities listing on the Canada Revenue Agency website.

The reasonable measures taken to confirm beneficial ownership as well as ownership, control and structure information, must be in line with the assessed risk of a money laundering or terrorist activity financing offence for that entity based on your risk based approach. Reasonable measures for entities assessed to be higher risk must go further to understand and confirm the beneficial ownership as well as establish the overall ownership, control, and structure of that entity. 

Reasonable measures for entities that are complex must go further in order to ensure you are able to understand and confirm the beneficial ownership as well as establish the ownership, control and structure of that entity. This does not mean, however, that a complex entity needs to be considered high risk.

Judgement must be used to discern the reasonable measures that are appropriate to take in each situation to confirm the accuracy of the information obtained, while considering the risk associated. During an assessment, FINTRAC expects that you will be able to produce the documentation that was collected to confirm the beneficial ownership information.

What if beneficial ownership information cannot be obtained or its accuracy cannot be confirmed?

If you are unable to obtain the beneficial ownership information, or if you obtain the beneficial ownership information but are unable to confirm its accuracy, you must:

  • take reasonable measures to verify the identity of the most senior managing officer of the entity;
  • treat the entity's activities as high-risk; and
  • apply the enhanced measures for high-risk clients, including enhanced ongoing monitoring.

The senior managing officer of a corporation or an entity may include, but is not limited to, a director, chief executive officer, chief operating officer, president, secretary, treasurer, controller, chief financial officer, chief accountant, chief auditor or chief actuary, or an individual who performs any of those functions. It may also include any other individual who reports directly to the entity's board of directors, chief executive officer or chief operating officer. In the case of a partnership, the most senior managing officer can be one of the partners.

In the case of a trust, the senior managing officer of a trust is the trustee, that is, the person who is authorized to administer or execute on that trust.

How do you verify the identity of an entity’s most senior managing officer?

To verify the identity of the most senior managing officer, you could use one of the methods outlined in Methods to identify individuals and confirm the existence of entities. However, the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR) does not specify that you must verify the senior managing officer's identity in accordance with the Regulations.

There is no record keeping obligation if you have successfully identified the senior managing officer. However, you may be asked to demonstrate the reasonable measures that were taken to identify the senior managing officer in the course of a FINTRAC assessment.

If the reasonable measures you took to identify the senior managing officer are unsuccessful, you must record the measures taken, the date you took them and the reason they were unsuccessful.

What if there is no individual who owns or controls 25% or more of a corporation or an entity other than a corporation or trust?

You may obtain information confirming that there is no actual individual who directly or indirectly owns or controls 25% or more of a corporation or of an entity other than a corporation or trust. This is not the same as being unable to obtain the beneficial ownership information.  

If you determine that there is no individual who directly or indirectly owns or controls 25% or more of a corporation or of an entity other than a corporation or trust, you must keep a record of the measures you took and the information you obtained in order to reach that conclusion. However, you are still required to obtain and confirm the ownership, control and structure of that entity.

In this situation, you do not need to verify the identity of the most senior managing officer. However, as part of your business practice, you may decide to record the names of individuals you feel have a managing role or control over a percentage of shares that you determine to be significant, even if it is less than 25%.

How do you keep beneficial ownership information up to date?

Beneficial ownership information must be kept up to date as part of your requirements to conduct ongoing monitoring of business relationships. You may have a documented process where you ask clients to confirm the information you have on record through your regular interactions with them.

However, beneficial ownership information will be updated based on your risk assessment of each client. For clients assessed as being high-risk, you must apply enhanced measures. Enhanced measures mean that you must take extra steps in accordance with the Regulations. This includes taking additional measures for client identification, conducting enhanced ongoing monitoring, and taking any other enhanced measures you identify as appropriate.

Beneficial ownership record keeping requirements

You must keep a record of the information you obtain and the measures you take to confirm the accuracy of beneficial ownership information, regardless of the outcome. The record of the measures you take can be part of your overall policies and procedures; while any information obtained will generate its own record associated with the entity for which beneficial ownership information was obtained. An individual record about measures taken may only be needed in situations where the measures taken differed from the process documented in your policies and procedures.

In a situation where no individual directly or indirectly owns or controls 25% or more of a corporation or an entity other than a corporation or trust, you must keep a record of the measures you took to confirm that information, the date it was done as well as the information obtained in order to reach your conclusion.

If an entity is a corporation, you must record:

  • the names of all directors of the corporation;
  • the names and addresses of all actual individuals who directly or indirectly own or control 25% or more of the entity; and
  • information on the ownership, control and structure of the corporation.

If an entity is a trust, you must record:

  • the names and addresses of all trustees, known beneficiaries and settlors of the trust; and
  • information on the ownership, control and structure of the trust.

If an entity is a business other than a corporation or trust, you must record:

  • the names and addresses of all individuals who directly or indirectly own or control 25% or more of the entity; and
  • information establishing the ownership, control and structure of the entity.

If an entity is a not-for-profit organization, you also need to keep a record that indicates whether the entity is a registered charity under the Income Tax Act or an unregistered   organization that solicits charitable donations from the public.

Retention: You must keep beneficial ownership records, as well as records that describe ownership, control and structure for five years from the day the last business transaction is conducted.

Exceptions to beneficial ownership determination

General: The beneficial ownership requirements do not apply when you do not have to confirm the existence of an entity.

Life insurance companies, brokers and agents: If you deal in reinsurance, the beneficial ownership requirements do not apply to you for those dealings.

Financial entities and securities dealers: You do not need to confirm the existence of a corporation, trust or other entity for the opening of a group plan account held within a dividend or a distribution reinvestment plan, if the sponsor of the plan is an entity:

  • whose shares or units are traded on a Canadian stock exchange; and
  • who operates in a country that is a member of the Financial Action Task Force (FATF).

In addition, if you are a financial entity, the beneficial ownership requirements do not apply to your credit card acquiring activities.

Appendix A

Example of a record for ownership, control and structure of a corporation:

ABC Canada Inc. is a for-profit corporation with 100 privately traded shares in circulation. It is incorporated pursuant to the Canada Business Corporations Act. John Brown owns 15 of the shares and Green Company Ltd. owns the other 85 shares. James Smith is the Chair of ABC Canada Inc.'s board of directors; his wife, Jane Smith, is ABC Canada Inc.'s Chief Financial Officer and a director; and their three children make up the other members of the board.

In this example, you must record:

  • the information on ownership, control and structure of the entity; which may include such things as the ownership of the corporation being shared between two owners - at 15% and 85% of the shares  and that ABC Canada Inc. is a privately traded, for-profit corporation incorporated pursuant to the Canada Business Corporations Act;
  • the names of all five members of the Smith family as directors of the corporation;
  • the names and addresses of all of the individuals who own or control, directly or indirectly, 25% or more of the shares of ABC Canada Inc. Since Green Company Ltd. owns 85% of the corporation's shares, it also exercises control. However, in a case like this, you must research further to determine whether any individual owns enough shares of Green Company Ltd. that would constitute 25% of ABC Canada Inc., or until you determine that there is no such individual; and
  • the measures you took to confirm the accuracy of this information.

Example of record for ownership, control and structure of an entity that is neither a corporation nor a trust:

Rainbow Money Services is a money services business (MSB) in Vancouver owned by Howard and Betty. Howard and Betty paid a lawyer to draft a partnership agreement for the business, which they both signed. According to the agreement, Howard will invest $100,000 in the partnership to buy equipment and rent space for the MSB, and Betty will be solely responsible for operating the MSB. All decisions related to the partnership must be unanimous; in case of a disagreement, either partner can decide to end the partnership. Howard and Betty will split the income from the MSB 50/50. If they decide to end the partnership, Howard will get 85% of the proceeds of the sale of the business assets, while Betty will get 15%.

In this example you must record:

  • the ownership structure of the entity, including the details of the partnership agreement between Howard and Betty;
  • Howard and Betty's names and addresses as both control the partnership; and
  • the measures you took to confirm the accuracy of this information.

Note: The business structure is important in this example as the ownership and control of the MSB is shared between Howard and Betty despite an uneven split of proceeds in the case the business is sold. You would need to retain details of the partnership agreement to meet your record keeping requirements.

Records on how you obtained this information may be grouped under your policies and procedures. The measures you took to confirm its accuracy could be demonstrated by having a copy of the partnership agreement.

March 2021 

March 2021

This guidance comes into force on June 1, 2021.

Beneficial ownership requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations apply to all reporting entities (REs).

The concealment of beneficial ownership information is a technique used in money laundering and terrorist activity financing schemes. Identifying beneficial ownership removes the anonymity of the individuals behind the transactions and account activities, which is a key component of Canada's anti-money laundering and anti-terrorist financing regime. By collecting beneficial ownership information and confirming its accuracy, REs are performing an important step to mitigate the risk of money laundering and terrorist activity financing, and ultimately, to protect the integrity of Canada's financial system.

This guidance answers the following questions:

  1. Who are beneficial owners?
  2. When must I obtain beneficial ownership information?
  3. When must I confirm the accuracy of beneficial ownership information?
  4. Are there circumstances where I do not have to obtain beneficial ownership information and confirm its accuracy?
  5. What beneficial ownership information do I need to obtain and confirm the accuracy of?
  6. How do I obtain the required beneficial ownership information?
  7. How do I confirm the accuracy of beneficial ownership information?
  8. What if I cannot obtain beneficial ownership information or confirm its accuracy?
  9. How do I verify the identity of an entity's chief executive officer or of the person who performs that function?
  10. What if there are no beneficial owners?
  11. What beneficial ownership records do I need to keep?

This guidance contains the following annexes, which provide examples of records for ownership, control and structure:

1. Who are beneficial owners?

Beneficial owners are the individuals who directly or indirectly own or control 25% or more of a corporation or an entity other than a corporation. In the case of a trust, they are the trustees, the known beneficiaries and the settlors of the trust. If the trust is a widely held trust or a publicly traded trust, they are the trustees and all persons who own or control, directly or indirectly, 25% or more of the units of the trust.Footnote 1

Beneficial owners cannot be other corporations, trusts or other entities. They must be the individuals who are the owners or controllers of the entity. It is important to consider and review the names found on official documentation in order to confirm the accuracy of the beneficial ownership information. It may be necessary to search through many layers of information in order to confirm who are the beneficial owners, as the names found on official documentation may not always reflect the actual beneficial owners.

2. When must I obtain beneficial ownership information?

You must obtain beneficial ownership information when you verify the identity of an entity in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR).Footnote 2 For more information about when you are required to verify the identity of entities, see your sector's guidance on When to identify persons and entities.

The beneficial ownership information that you must obtain varies depending on whether the entity is a corporation, an entity other than a corporation (such as a partnership), a trust, or a widely held or publicly traded trust. The specific beneficial ownership information that you must obtain for each type of entity is detailed in section "5. What beneficial ownership information do I need to obtain and confirm the accuracy of?".

3. When must I confirm the accuracy of beneficial ownership information?

You must take reasonable measures to confirm the accuracy of the beneficial ownership information when you first obtain it and in the course of conducting ongoing monitoring of your business relationships.Footnote 3

4. Are there circumstances where I do not have to obtain beneficial ownership information and confirm its accuracy?

You do not have to obtain beneficial ownership information and take reasonable measures to confirm its accuracy in the following situations:

  1. For a group plan account held within a dividend or a distribution reinvestment plan. This includes plans that permits purchases of additional shares or units by the member with contributions other than the dividends or distributions paid by the plan sponsor, if the sponsor is an entity:Footnote 4
    • whose shares or units are traded on a Canadian stock exchange; and
    • that operates in a country that is a member of the Financial Action Task Force.
  2. If you are a financial entity, beneficial ownership requirements do not apply to your activities in respect of the processing of payments by credit card or prepaid payment product for a merchant.Footnote 5
  3. If you are a life insurance company, broker or agent, and you deal in reinsurance, beneficial ownership requirements do not apply to you for those dealings.Footnote 6

All RE sectors

The beneficial ownership requirements do not apply if you are not required to verify the identity of an entity under the Regulations because of a related exception. This is because your obligation to verify identity for a particular transaction, activity, or client does not apply in that circumstance.

5. What beneficial ownership information do I need to obtain and confirm the accuracy of?

When you verify an entity's identity in accordance with the PCMLTFR, you must obtain the following information about beneficial owners:Footnote 7

Corporations

  • the names of all directors of the corporation and the names and addresses of all persons who directly or indirectly own or control 25% or more of the shares of the corporation.

Trusts

  • the names and addresses of all trustees and all known beneficiaries and settlors of the trust.

Widely held or publicly traded trusts

  • the names of all trustees of the trust and the names and addresses of all persons who directly or indirectly own or control 25% or more of the units of the trust.

Entities other than corporations or trusts

  • the names and addresses of all persons who directly or indirectly own or control 25% or more of the entity.

In all cases, you must obtain information establishing the ownership, control and structure of the entity.Footnote 8

You must also take reasonable measures to confirm the accuracy of the information when you first obtain it and in the course of the ongoing monitoring of your business relationships.Footnote 9

If you verify the identity of a not-for-profit organization, you must also determine if the entity is:Footnote 10

  • a charity registered with the Canada Revenue Agency under the Income Tax Act; or
  • an organization, other than one referred to above, that solicits charitable donations from the public.

6. How do I obtain the required beneficial ownership information?

To obtain beneficial ownership information, which includes information on the ownership, control and structure, you could have the entity provide it, either verbally or in writing, or you could search for publicly available information.

For example:

  • the entity can provide you with official documentation;
  • the entity can tell you the beneficial ownership information and you can write it down for record keeping purposes; or
  • the entity can fill out a document to provide you with the information.

7. How do I confirm the accuracy of beneficial ownership information?

You must take reasonable measures to confirm the accuracy of the beneficial ownership information that you obtain.Footnote 11 These reasonable measures cannot be the same as the measures you used to obtain the information.

Your reasonable measures could include referring to official documentation or records. For example, for a corporation or other entity, you could refer to records such as, but not limited to, the:

  • minute book;
  • securities register;
  • shareholders register;
  • articles of incorporation;
  • annual returns; 
  • certificate of corporate status;
  • shareholder agreements;
  • partnership agreements; or
  • board of directors' meeting records of decisions.

It is also acceptable to have a client sign a document to confirm the accuracy of the beneficial ownership information you obtained, which includes information on ownership, control and structure. In this case, it is possible for one document to be used to satisfy the two steps—namely to obtain the information and to confirm its accuracy by means of the signature.

In the case of a trust, you could confirm the accuracy of the information by reviewing the trust deed, which should provide you with the information needed.

Other reasonable measures can include:

  • asking the client to provide supporting official documentation;
  • conducting an open-source search; or
  • consulting commercially available information.

As a best practice, you should also confirm whether a not-for-profit organization is a charity registered with the Canada Revenue Agency by consulting the charities listing on the Canada Revenue Agency website.

The reasonable measures that you take to confirm the accuracy of beneficial ownership information, which includes ownership, control, and structure information, must align with your risk assessment of the entity's risk for money laundering or terrorist activity financing offences. The reasonable measures you take with entities assessed to pose a high risk must go further to help you understand and confirm the beneficial ownership, as well as establish the overall ownership, control, and structure of that entity. 

The reasonable measures that you take with entities that have a complex business structures must go further to ensure that you are able to understand and confirm the accuracy of beneficial ownership, which includes establishing the ownership, control and structure of that entity. This does not mean, however, that you need to consider or treat a complex entity as posing a high risk. You need to choose reasonable measures that are appropriate to the situation.

8. What if I cannot obtain beneficial ownership information or confirm its accuracy?

If you are unable to obtain the beneficial ownership information, to keep it up to date in the course of the ongoing monitoring of business relationships, or to confirm its accuracy, when it is first obtained, or during the course of ongoing monitoring then you must:Footnote 12

  • take reasonable measures to verify the identity of the entity's chief executive officer or of the person who performs that function; and
  • apply the special measures for high-risk clients, including enhanced ongoing monitoring.

For more information on enhanced ongoing monitoring, see FINTRAC's Ongoing monitoring requirements guidance.

9. How do I verify the identity of an entity's chief executive officer or of the person who performs that function?

The PCMLTFR does not require that you verify the identity of the chief executive officer or of the person who performs that function in accordance with the prescribed methods. However, you could use one of the methods outlined in the Methods to verify the identity of persons and entities guidance to meet this obligation.

Additionally, there is no record keeping obligation if you have identified the chief executive officer or a person who performs that function using the prescribed methods to verify identity. However, during a FINTRAC examination, you could be asked to demonstrate the reasonable measures that you took to identify the chief executive officer or person who performs that function.

10. What if there are no beneficial owners?

You may obtain information confirming that there is no individual who directly or indirectly owns or controls 25% or more of a corporation, a widely held or publicly traded trust, or an entity other than a corporation or trust. This is not the same thing as being unable to obtain the beneficial ownership information.  

If you determine that there is no individual who directly or indirectly owns or controls 25% or more of a corporation, a widely held or publicly traded trust, or an entity other than a corporation or trust, you must keep a record of the measures you took and the information you obtained in order to reach that conclusion.Footnote 13 However, you are still required to obtain and take reasonable measures to confirm information about the ownership, control and structure of the entity.

11. What beneficial ownership records do I need to keep?

You must keep a record of the beneficial ownership information you obtain and of the measures you take to confirm the accuracy of the information.Footnote 14

The measures that you take to confirm beneficial ownership information can be part of your overall policies and procedures, so a separate record may not be needed. You only need to keep an individual record of the specific measures you take to confirm the accuracy of beneficial ownership information in situations where the measures differ from those that are documented in your policies and procedures.

For a corporation, you must record:Footnote 15

  1. the names of all directors of the corporation;
  2. the names and addresses of all persons who directly or indirectly own or control 25% or more of the shares of the corporation; and
  3. information establishing the ownership, control and structure of the corporation.

For a trust, you must record:Footnote 16

  • the names and addresses of all trustees, known beneficiaries and known settlors of the trust; and
  • information establishing the ownership, control and structure of the trust.

For a widely held or publicly traded trust, you must record:Footnote 17

  • the names of all trustees of the trust;
  • the names and addresses of all persons who directly or indirectly own or control 25% or more of the units of the trust; and
  • information establishing the ownership, control and structure of the trust.

For an entity other than a corporation or trust, you must record:Footnote 18

  • the names and addresses of all persons who directly or indirectly own or control 25% or more of the entity; and
  • information establishing the ownership, control and structure of the entity.

If you verify the identity of a not-for-profit organization, you must also keep a record that indicates whether the entity is:Footnote 19

  • a charity registered with the Canada Revenue Agency under the Income Tax Act; or
  • an organization, other than a registered charity, that solicits charitable donations from the public.

In situations where no individual directly or indirectly owns or controls 25% or more of a corporation, a widely held or publicly traded trust, or an entity other than a corporation or trust, you must keep a record of the measures you took to confirm the accuracy of the information, as well as the information you obtained in order to reach that conclusion. The date you took the measures should also be included as a best practice.

Retention: You must keep these records for at least five years from the day the last business transaction is conducted.Footnote 20

Annex 1—Example of a record of beneficial ownership information for a corporation

Scenario:

ABC Canada Inc., a privately held corporation incorporated under the Canada Business Corporations Act, carries out a transaction or activity for which you have to verify its identity, triggering your beneficial ownership obligations. You learn that ABC Canada Inc. is owned by John Brown and Green Company Ltd. You discover that John owns 15% of the shares in the company (15 of the 100 total) and that Green Company Ltd. owns 85% of the shares (85 of 100 total). Since Green Company Ltd. owns and controls more than 25% of ABC Canada Inc., you need to find the beneficial owners, who cannot be a corporation or an entity. You inquire further and discover that Tina Grey owns 70% of Green Company Inc.'s shares and her two children, Alex and Lucy Grey, each own 15% respectively. Next, you learn that ABC Canada Inc.'s board of directors is made up of:

  • James Lochlin, Chair;
  • Jane Smith, Chief Financial Officer;
  • Mark Jones, director;
  • Tammy Maki, director; and
  • Lisa Bailey, director.

Diagram 1—Beneficial ownership information for a corporation

In this example, you must record:

  1. The names of all directors of ABC Canada Inc.:
    • James Lochlin (chair);
    • Jane Smith;
    • Mark Jones;
    • Tammy Maki; and
    • Lisa Bailey.
  2. The names and addresses of all of the persons who directly or indirectly own or control 25% or more of the shares of ABC Canada Inc.:
    • The name and address of Tina Grey, who owns 70% of Green Company Ltd. Since Green Company Ltd. owns 85% of ABC Canada Inc.'s shares, and Tina owns 70% of Green Company Ltd.'s shares, Tina indirectly owns and controls more than 25% of the shares of ABC Canada Inc.
  3. The information establishing the ownership, control and structure of ABC Canada Inc., including:
    • the ownership of ABC Canada Inc. being shared between John Brown (15%) and Green Company Ltd. (85%);
    • the ownership of Green Company Ltd. being shared between Tina Grey (70%), Alex Grey (15%), and Lucy Grey (15%);
    • the control of ABC Canada Inc. significantly being held by Green Company Ltd. and specifically Tina Grey (who indirectly owns and controls more than 25% of ABC Canada Inc.'s shares);
    • the structure of ABC Canada Inc., including that it is a privately held corporation, and
    • other structure details about ABC Canada Inc., including the positions held by each director and any organization chart.
  4. The reasonable measures you took to confirm the accuracy of the information:
    • the steps you took as reasonable measures to confirm the accuracy of this information; and
    • any official documents obtained to support the measures you took.

Annex 2—Example of a record of beneficial ownership information for an entity that is neither a corporation nor a trust

Scenario:

Rainbow Services, a partnership, carries out a transaction or activity for which you have to verify its identity, thus triggering your beneficial ownership obligations. You learn that Howard White and Betty Green are the two partners in this partnership. Betty is the general partner and is responsible for operating the day-to-day operations and Howard is the limited partner who has invested funds into the partnership. All decisions related to the partnership must be unanimous, and either partner can decide to end the partnership.

Diagram 2—Beneficial ownership information for an entity that is neither a corporation nor a trust

In this example you must record:

  1. The names and addresses of all persons who directly or indirectly own or control 25% or more of Rainbow Services:
    • Howard and Betty's names and addresses, as the partners who equally own and control the partnership.
  2. The information establishing the ownership, control and structure of Rainbow Services, including that:
    • the ownership and control of Rainbow Services is held equally between Howard (50%) and Betty (50%), the structure of Rainbow Services, including that it is a partnership between Howard and Betty, and
    • any other structure details about Rainbow Services, including any organizational chart.
  3. The reasonable measures you took to confirm the accuracy of the information:
    • the steps you took as reasonable measures to confirm the accuracy of this information; and
    • any official documents obtained to support the measures you took, such as a copy of the partnership agreement.

Annex 3—Example of a record of beneficial ownership information for a trust (other than a widely held or publicly traded trust)

Scenario:

A trust carries out a transaction or activity for which you are required to verify its identity, triggering your beneficial ownership obligations. You learn that Robert Jones established a spousal trust for his wife Sue. He transferred assets into the trust and designated Joe Johnson as the trustee.

Diagram 3—Beneficial ownership information for a trust (other than a widely held or publicly traded trust)

In this example you must record:

  1. The names and addresses of all trustees, known beneficiaries and known settlors of the trust:
    • Robert's name and address, as he is the settlor;
    • Joe's name and address, as he is trustee; and
    • Sue's name and address, as she is the beneficiary.
  2. The information establishing the ownership, control and structure of the trust, including:
    • The beneficial ownership information is reflected in the information required to be obtained for the trust:
      • Robert is the settlor and can modify or revoke the terms of the trust;
      • Joe is the trustee and controls the assets in the trust; and
      • Sue, as the beneficiary, is the only person entitled to receive the assets or income from the trust.
      • The structure of the trust, including that it is a spousal trust.
  3. The reasonable measures you took to confirm the accuracy of the information:
    • the steps you took as reasonable measures to confirm the accuracy of this information; and
    • any official documents obtained to support the measures you took, such as the trust agreement.
Date Modified: