Modifications to the Act Respecting the Legal Publicity of Enterprises – March 31st, 2023
Some new modifications will come into effect on March 31, 2023 regarding the Act mainly to improve the transparency of enterprises1(hereinafter called the "Act"), which will have a direct impact on the Act respecting the legal publicity of enterprises (hereinafter called the "A.R.L.P.E.") for all enterprises operating in the province of Quebec, no matter the jurisdiction of their constitution. The main objective of the Act is to improve the transparency of enterprises in order to fight against fraud or any other form of fiscal crime, making it mandatory for every registrant of the A.R.L.P.E. to make new declarations before the Registraire des entreprises du Québec (hereinafter called the "REQ"), regarding its Ultimate Beneficiary. In accordance with the A.R.L.P.E. a registrant includes all corporations, partnerships and trusts that are voluntarily registered or required to be registered with the REQ. It should be noted that non-profit legal persons and associations within the meaning of the Civil Code of Québec are exempt from this new obligation.
To be noted that each piece of identification provided must be valid, must be issued from a legal authority and must contain the first name, the last name and the date of birth of the individual in question. These pieces of identification will be kept by the REQ until the registration, or the declaration of the enterprise is filed and then will be disposed of in order to respect the requirements of the Act respecting the protection of personal information in the private sector
We would also like to inform you that the dates of birth, the personal addresses of individuals who have declared a professional address and the names and addresses of minors will not be accessible to the public. However, bailiffs, in the exercise of their profession, will have access to the personal addresses of all the Ultimate Beneficiaries.
1 Act mainly to improve the transparency of enterprises, SLQ 2021, c 19
An Ultimate Beneficiary is an individual that corresponds to at least one of the following criteria2 :
It is important to note that the Act specifies that where individual persons who hold, even indirectly, or are beneficiaries of shares, units or interests in the registrant have agreed to jointly exercise the voting rights attached to such shares, units or interests, and where the effect of such agreement is to give them together the power to exercise 25% or more of such voting rights, each of them is considered to be an Ultimate Beneficiary of the registrant. Thus, the existence of a shareholders’ agreement which includes a voting agreement, for example, would result in a group of shareholders individually holding less than 25% of the voting rights being considered Ultimate Beneficiaries.
The Act also establishes a presumption that the individual carrying on a sole proprietorship subject to the A.R.L.P.E.is presumed to be the sole Ultimate Beneficiary, unless he or she declares otherwise.
On March 31st, 2024, it will be possible to search an enterprise with only the first and last name of an individual, instead of having to search the exact name of the business or the Quebec enterprise number (NEQ).
2 Gouvernement du Québec, Trouver et identifier un bénéficiaire ultime d'une entreprise. [online], Trouver et identifier un bénéficiaire ultime d'une entreprise | Gouvernement du Québec (quebec.ca) (Page consulted on February 28th, 2023) – Translated for this letter
Starting on March 31st, 2023, all the annual updating that will be done by our law firm will have to contain all the aforementioned information. If you benefit from our minute book maintenance service, you will soon receive the detailed procedure by which you will have to communicate all these new documents and information to us. We will then take care of transmitting everything to the REQ in accordance with their requirements.
If you have any questions about these new norms, do not hesitate to contact a member of our team who will be happy to answer your questions and guide you through the process