Legal

Beneficial Ownership Disclosure Is Real in Canada, Narrowed in the US, and the Asymmetry Is the Actual Exposure

The pattern

Canada's Bill C-42 amendments to the CBCA received Royal Assent in November 2023. Federal corporations must maintain a register of individuals with significant control and file that information with Corporations Canada; provincial equivalents exist in Ontario, British Columbia, and elsewhere. Penalties reach $200,000 and six months' imprisonment.

In the US, FinCEN issued an interim final rule in March 2025 narrowing Corporate Transparency Act reporting to foreign-formed entities registered to do business in the US only. Domestic US companies and US persons are currently exempt. FinCEN has stated this exemption is interim, pending a final rule expected sometime in 2026.

Why it matters now

A cross-border structure with a Canadian holding company registered to do business in the US may still carry active US reporting obligations as a foreign entity, even while its Canadian operating company is separately obligated under the CBCA. Treating either side as settled, permanently gone in the US or permanently stable in Canada, is the exposure.

Coordinated response

• Confirm which entities in the structure are CBCA, provincial, or US-formed, and map each against its current obligation, not its historical one.
• Verify the Canadian ISC register is current for every applicable corporation; confirm the most recent filing with Corporations Canada or the relevant province.
• For any Canadian-formed entity registered to do business in the US, confirm foreign-reporting-company status under the March 2025 interim rule and file if required.
• Do not treat the US domestic exemption as final. Build a monitoring checkpoint for FinCEN's promised final rule rather than assuming the current exemption holds indefinitely.
• Review any nominee, bare trustee, or holding arrangement across the structure for whether it would survive scrutiny if either jurisdiction's disclosure requirements tightened.