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Bill 78: Declaring an Ultimate Beneficiary

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Corporate Commercial Bulletin

Bill 78, entitled An act mainly to improve the transparency of enterprises (“Transparency Act”), amending the Act respecting the legal publicity of enterprises (“Publicity Act”), now requires the disclosure of information about the “ultimate beneficiaries” of enterprises subject to the Publicity Act.

Enterprises that Must Declare their Ultimate Beneficiaries

Under the Transparency Act, all enterprises subject to the Publicity Act, whether Quebec, Canadian or foreign,[1] now have to declare their ultimate beneficiaries; these enterprises include:

  1. business corporations;
  2. natural persons who operate a sole proprietorship;
  3. partnerships (e.g.: limited partnerships, general partnerships);
  4. cooperatives, except financial services cooperatives; and
  5. trusts operating a commercial enterprise.[2]

In addition to the disclosure obligations, registrants are subject to an additional obligation of diligence: they have to take the necessary measures, notably by means of a legal, documentary and factual analysis of their situation, to locate and ascertain the identities of their ultimate beneficiaries.[3] That obligation also extends to updates of the information required by the Publicity Act, including updates that must be done on an annual basis and when a change of ultimate beneficiary occurs in the course of the year.[4]

Enterprises Exempt from Declaring their Ultimate Beneficiaries

Under the Transparency Act, certain enterprises that are registrants under the Publicity Act are exempt from their obligation to declare their ultimate beneficiaries in the Enterprise Register of Québec ("REQ"). Those enterprises are:

  1. a legal person established in the public interest;
  2. a non-profit legal person established for a private interest;
  3. a reporting issuer within the meaning of sections 68 et seq. of the Securities Act;
  4. a financial institution referred to in paragraphs 1 to 3 of section 4 of the Insurers Act:
    1. insurers authorized to carry on insurer activities under the Insurers Act,
    2. deposit institutions authorized under the Deposit Institutions and Deposit Protection Act, and
    3. financial services cooperatives within the meaning of the Act respecting financial services collectives;
  5. a trust company governed by a provincial or federal statute or a statute of another province or territory of Canada;
  6. a bank or authorized foreign bank listed in Schedules I, II and III of the Bank Act; and
  7. an association within the meaning of the Civil Code of Québec.[5]

Determining Who the Ultimate Beneficiaries of an Enterprise Are

In general, an ultimate beneficiary is [translation] “a natural person who holds a right that allows them to benefit from a portion of the income or assets of an enterprise or a right that allows them to direct or influence the activities of the enterprise.”[6] The Transparency Act specifies that an ultimate beneficiary of a registrant is, among other things, an individual who:

  1. Is a holder, even indirectly, or beneficiary of a number of shares or units of the registrant conferring on the person the power to exercise 25% or more of the voting rights attached to the shares or units;
  2. Is a holder, even indirectly, or beneficiary of a number of shares or units the value of which corresponds to 25% or more of the fair market value of all the shares or units issued by the registrant; or
  3. Has a direct or indirect influence that, if exercised, could result in control in fact within the meaning of sections 21.25 and 21.25.1 of the Taxation Act (chapter I-3), with the necessary adaptations.[7]

The Transparency Act provides for other situations where an individual will be considered the ultimate beneficiary, such as  general partners of a limited partnership and trustees of a business trust.trustees of a trust operating a commercial entreprise.


The Draft Regulation respecting the legal publicity of enterprises, published on December 21, 2022 (the “Draft Regulation”), proposes the following in relation to the concept of ultimate beneficiary:[8]

  1. a natural person who controls, directly or indirectly, the number of a registrant’s shares or units that corresponds to 25% or more of the voting rights or the fair market value will be considered to be an ultimate beneficiary;
  2. a natural person who is a party to a voting agreement allowing it to control, directly or indirectly, a number of the shares or units of an entity will also be considered to be an ultimate beneficiary; and
  3. with respect to the obligation to declare the percentages of shares or units that an ultimate beneficiary holds or is the beneficiary of, the beneficiary must disclose the range that they hold: (i) 25% to 50%; (ii) over 50% to 75%; or (iii) over 75%.

Enterprises Considered to be Natural Persons

An ultimate beneficiary is generally a natural person. However, in certain situations, the Transparency Act provides that an enterprise may be considered to be a natural person and thus to be an ultimate beneficiary. The enterprise therefore need not continue searching for the natural persons who control it. It must then declare the name of the enterprise as the ultimate beneficiary. Note that the enterprises concerned may be enterprises that are not subject to the Publicity Act and are therefore not registered in the REQ.

The enterprises concerned are the same as the enterprises that are exempt from declaring their ultimate beneficiaries and also a legal person acting as a trustee.[9]

Information to Be Disclosed

Under the Transparency Act, the following information relating to ultimate beneficiaries must be disclosed:[10]

  1. the names, domiciles and dates of birth of the ultimate beneficiaries and any other name used by them in Quebec and by which they are identified;
  2. the type of control exercised by each ultimate beneficiary or the percentage of shares or units they hold or of which they are beneficiaries; and
  3. the date on which an ultimate beneficiary became one and the date on which the ultimate beneficiary ceased to be one.

For details about the content of the disclosures relating to the names, domiciles and dates of birth of ultimate beneficiaries, please consult our bulletin on disclosure obligations under the Transparency Act.

Next Steps

The Transparency Act allows the government to determine, by regulation, other information in the REQ that may not be consulted, new cases and conditions for determining ultimate beneficiaries, and new terms regarding the control exercised by ultimate beneficiaries.[11] It will be wise to keep a close eye on regulatory developments in the coming months.


Disclaimer: This bulletin is of general application and is dependent on, among other things, the particular facts of each case; some criteria may have been simplified in the bulletin and the applicable law may have changed since the bulletin was issued.


[1]      In the case of Canadian or foreign enterprises, they have the obligation of registering in the REQ and declaring their ultimate beneficiaries, in particular when they have their domicile in Quebec or carry on an activity there, including the operation of an enterprise.

[2]      Publicity Act, s. 21.

[3]      Transparency Act, s. 12.

[4]      Publicity Act, ss. 39 et seq.

[5]      Transparency Act, s. 1, see new s. 0.7 of the Publicity Act, and s. 8.

[6]      Government of Quebec. “Trouver et identifier un bénéficiaire ultime d'une entreprise”, online: Page retrieved on February 5, 2023. 

[7]      Transparency Act, s. 1, see new s. 0.4. of the Publicity Act.

[8]      Draft regulation, December 21, 2022, Gazette Officielle du Québec No. 51, (Page: 7147), s. 6.

[9]      Transparency Act, s. 1, see new s. 0.7 of the Publicity Act, and s. 8.

[10]     Transparency Act, s. 8.

[11]      Transparency Act, s. 23.

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