Canada

TECHNICAL COMPLIANCE ANNEX
Criterion 23.3— Scope issue: see 23.1. See R.19 for a description of this requirement.
Criterion 23.4— Scope issue: see 23.1. The requirements for DNFBPs are the same as those applied
to FIs under R.21.
Weighting and Conclusion:
Canada is non-compliant with R.23.
Recommendation 24 – Transparency and beneficial ownership of legal persons
Canada was rated NC with former R.33 based on concerns over a lack of transparency for legal
entities, the availability of bearer shares without adequate safeguards against misuse, and a lack of
powers by the authorities to ensure the existence of adequate, accurate and timely beneficial
ownership information for legal entities. Since 2008, the obligations for FIs to obtain information on
the identity of beneficial owners and the CRA’s ability to disseminate information on legal entities to
the RCMP have been strengthened.
Technical compliance Annex
Canada’s corporate legal framework consists of federal, provincial and territorial laws: (i) Legal
entities may be established at the federal level under the Canada Business Corporation Act (CBCA);
the Canada Not-for-Profit Corporations Act (NFP Act), or the Canada Cooperatives Act (CCA).
Federally incorporated entities are entitled to operate throughout Canada but in addition to
registration at the federal level, are also subject to registration with the province or territory in
which they carry out business. (ii) Each of the thirteen territories and provinces regulates the types
of legal entities that can be established at the local level. Eight provinces and territories have enacted
specific laws that provide for the establishment of corporations and NPOs. Prince Edward Island,
Newfoundland and Labrador, Alberta, Manitoba, Quebec, and New Brunswick do not have specific
NPO legislation in place but regulate NPOs through the relevant provincial company law.
Legal entities incorporated at the provincial or territorial level enjoy business name protection only
in the province or territory where they are incorporated. To operate in another province in Canada,
they have to register with that province but there is no guarantee that they will be able to use their
corporate name (e.g. a business entity with the same name may already be operating in that
province). Federal, provincial and territorial corporate entities may carry out business
internationally if the foreign country recognizes the type of corporate entity.
In addition to legal entities, all provinces provide for the establishment of general and limited
partnerships pursuant to common law rules; and all provinces, but Yukon, Prince Edward Island and
Nunavut have passed statutes to provide for the establishment of limited liability partnerships.
Partnerships are not subject to registration as part of the establishment process, but most provinces
and territories require registration of businesses before a partnership may operate there. Business
registration obligations under provincial and territorial laws also apply to foreign entities wishing to
carry out business in Canada.
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Anti-money laundering and counter-terrorist financing measures in Canada - 2016 © FATF and APG 2016