BILL 78
ACT TO IMPROVE THE TRANSPARENCY OF ENTERPRISES
The purpose here is simply to dispel certain doubts on the legal level and to provide useful references concerning the application of Bill 78, which has now become the Act to improve the transparency of enterprises¹, which comes into force on March 31, 2023, particularly with respect to syndicates of co-ownership. For a good analysis of the new provisions and their application, you can consult SOLUTION CONDO’s blog of March 10, 2023, which is very useful and completes the subject².
The law amends the Act respecting the legal publicity of enterprises³ and proposes implementing regulations⁴. Two of the new obligations are those of disclosing the dates of birth of syndicate directors, and concerning the obligation to provide their identification.
The effective date of March 31st and its application in practice: The real deadlines
Nothing irretrievable will happen on March 31st! Section 29 of the Act contains the applicable transitional provisions.
Syndicates that file a tax return
For syndicates filing a Quebec income tax return, the date on which they will be required to declare to the Registraire des entreprises (REQ) the date of birth of directors alongside their identification documents will be within six (6) months following the end of their fiscal year⁵. For example, for a fiscal year ending December 31st, 2022, the deadline will be July 1st, 2023.
These syndicates are referred to as “twinned” companies under the Income Tax Act because they usually file both returns (income tax return and annual update of the REQ) at the same time.
However, there is a catch this year. According to a directive from the Registraire des entreprises, it will not be possible for so-called “twinned” companies to file their REQ annual update return at the same time as their tax return, at least for filing after March 31st, 2023, since they will have to check “no” in boxes 39 or 436 of the return⁶ form. The directive reads as follows:
“In addition, on the first tax return following the coming into force of the new obligations, so-called “twinned” enterprises will have to check “no” in box 39 or 436 and file their annual update declaration directly with the Registraire des entreprises to declare new information. After this declaration with the Registraire, enterprises will be able to file their annual update declaration again via the income tax return” (our translation).
The deadline for all other syndicates
As for the other syndicates (i.e. those that do not consider themselves required to file an income tax return and that file an annual return separately) it is only when they file their next annual update return that they will have to declare to the Registraire des entreprises (REQ) the date of birth of the directors and provide it with identification documents.
As required by the Bill, this will therefore be during the period between May 15th and November 15th , 2023⁷.
Update after March 31st, 2023, between two annual declarations
The new section 68.1 of the Act respecting the legal publicity of enterprises, added by section 14 of the Act, provides that every update must contain a copy of an identification document for each director. What about the date of birth?
Although section 29 of the Act, as a transitional provision, provides that the obligation to provide the date of birth of directors and their identification only comes into force when the first annual update is filed following the date of coming into force (March 31st, 2023) of the provisions that require them, we believe that it is wiser to provide this information when an annual declaration is updated, i.e.: Addition or replacement of a director.
Retention of identification documents
The copy of a director’s identification will be retained by the Registrar until the date of registration (for a newly formed syndicate), or until the date of an update (filing the annual return) ⁸. It will “then” be destroyed in conformity with the Act respecting access to documents held by public bodies and the protection of personal information⁹ and the Archives Act¹⁰.
It is assumed here that the submitted identification will either be destroyed by fire or shredded ¹¹.
When will it be destroyed? Hard to say, of course. “Then“, says the new article 68.1!
As for the obligations of the boards of directors, managers, and administrators of co-ownerships, with regard to these personal documents which are the identification documents, it would be wise to destroy them as soon as the information collected is published in the REQ¹².
Incidentally, this obligation to produce identification documents applies only to directors. Any other representative of the syndicate, i.e.: president or secretary who is not a director¹³, proxy, manager, agent, employee, etc., is therefore excluded.
Consultation of information in the REQ
The information concerning the date of birth of a director obtained by the Registrar will not be available for consultation, at least not by the general public, nor by professionals¹⁴.
The version of an extract of the REQ , either a registration or a declaration of annual update or other, available to the public, will therefore not be the same as the one kept by the Registrar.
The same will apply to the domicile of a director when a business address has been declared¹⁵. Under section 11 of the Act, the new section 35.2 of the Act respecting legal publicity will allow syndicates to declare a business address for its directors. As an example, a director could declare as a business address the syndicate’s office, not his or her home address.
However, a director will only be able to declare one business address, which means that someone who is a director of several syndicates (or companies or other legal persons or corporations), will have to declare the same business address for all the entities they represent, if they does not want to disclose their home address¹⁶.
In addition, a judicial officer will be able to consult the domicile information of any natural person, thus that of the directors ¹⁷.
On all general questions regarding these new obligations, you can consult the website of the Registraire des entreprises du Québec, which will undoubtedly be updated continuously¹⁸.
Written by Me Champagne
¹ 2021, chapitre 19 des Lois du Québec
³ Chapitre 44.1 RLRQ
⁴ Voir, entre autres, le Projet de règlement publié le 21 décembre 2022 (Gazette Officielle, partie II, p. 7147ss., et le Projet de règlement du 18 janvier 2023 (Gazette Officielle, partie II, p. 143A, exemptant les syndicats de copropriété de l’obligation de divulguer des informations concernant les bénéficiaires ultimes, qui n’a de toute façon aucune application en copropriété).
⁵ Certains prétendent encore que les syndicats, qui sont pourtant des personnes morales, ne seraient pas tenus de produire une déclaration de revenus car ils n’ont aucun revenu imposable, mais la doctrine majoritaire est qu’ils y sont tenus; donc, on applique l’article 3 (1) du Règlement d’application de la Loi sur la publicité légale des entreprises, qui oblige ces entreprises à produire leur déclaration 6 mois après la fin de leur année financière. Voir aussi la directive de Revenu-Québec.
⁷ Art. 3 (4) du même Règlement d’application.
⁸ Art. 14 de la Loi, ajoutant l’art. 68.1 à la Loi sur la publicité légale des entreprises.
⁹ RLRQ, chapitre A-2.1 (Voir les articles 63.1 et 73)
¹⁰ RLRQ, chapitre A-21.1
¹¹ Voir l’article 9 du Règlement sur le calendrier de conservation, le versement, le dépôt et l’élimination des archives publiques, RLRQ, chapitre A‑21.1, r.2
¹² C’est ce que SOLUTION CONDO suggère dans son blogue du 10 mars 2023 : https://solutioncondo.com/registre-des-entreprises-du-quebec-req-nouvelles-obligations-pour-fournir-des-pieces-didentite/
¹³ Le syndicat étant une personne morale, tout comme une compagnie, il est possible que les dirigeants (officiers) ne soient pas des administrateurs. Cette situation se voit plus souvent dans les compagnies ou sociétés commerciales.
¹⁴ Art. 17 de la Loi, ajoutant l’article 99.1 à la Loi sur la publicité légale
¹⁵ Idem, nouvel art. 99.1
¹⁶ Art. 11 de la Loi, ajoutant l’article 35.2 à la Loi sur la publicité légale, deuxième alinéa : « Une personne physique ne peut avoir qu’une seule adresse professionnelle aux fins de l’application de la présente loi. »
¹⁷ Idem, nouvel art. 99.1, deuxième alinéa