Do buyers need to check the significant control register?

A significant control register is a record that a corporation keeps of the individuals who ultimately own or control it, whether through shares or in some other way. The legal duty to keep it sits with the corporation, not with the person buying the business. Buyers look at it anyway, because it answers a question every purchase depends on: who really controls the company on the other side, and are they the people signing? The glossary entry on the beneficial ownership register defines the term.

What the register can and cannot tell you

Under the federal rules, a corporation records each individual’s identifying details, the dates control changed and a description of the control. Only part of that is public, and the federal search works by corporation name, corporation number or business number rather than by a person’s name. The register is a cross-check, not a verdict. If it names someone the shareholder list does not, or leaves out a person who plainly runs the business, you have a question for the seller.

Which register applies depends on the corporation

The federal register applies to most corporations created under the Canada Business Corporations Act. Provinces run their own regimes. In British Columbia, private companies keep a transparency register the public cannot see; only directors, law enforcement and specified officials may inspect it, so a buyer asks the seller to produce it. Quebec requires certain enterprises to declare their ultimate beneficiaries to the enterprise registrar, with the stated aim of making their identity public.

A stale or missing register is itself a finding

The federal guidance expects a corporation to keep its register current, taking reasonable steps to confirm it at least once a year and whenever it learns of a change. A register that has never been updated, or that nobody can produce, points to record-keeping that needs fixing. In a share purchase you end up owning the corporation that has to fix it, so raise it with your lawyer before the price is settled.

A practical way to use it

• Confirm which statute the target is incorporated under, because that decides which register applies.
• Ask the seller for the current register and compare it with the share register and the minute book.
• Search the public registry, where one exists, using the corporation’s name or number.