CANADA Law and Practice Contributed by: Sarah Gingrich, Sean Stevens, Tracy Hooey and Marie-Josée Neveu, Fasken
• Annual and Quarterly Financial Statements includ - ing the company’s income statement, balance sheet, statement of changes in equity and cash flow statement. • Annual and Quarterly Management’s Discussion and Analysis (MD&A) which provides manage - ment’s analysis of the company’s financial condi - tion, results of operations and future prospects. • An Annual Information Form (AIF) that details the company’s operations, management, governance structure and risk factors. • A Proxy Circular distributed in advance of the com - pany’s AGM that provides information to share - holders regarding matters subject to a shareholder vote – eg, the election of directors and auditor appointment. • Annual and Quarterly CEO/CFO certifications of the accuracy and completeness of the company’s financial statements and disclosures. 5.2 Corporate Governance Arrangement Disclosure Canadian securities laws have, since 2005, required the disclosure of certain public company corporate governance practices, including relating to: • board composition and independence; • the board’s mandate; • ethical business conduct and codes; • the continuing education of directors; • the nomination process for directors; • the compensation process for directors; and • standing board committees. Canadian securities regulators have also issued relat - ed guidelines for corporate governance disclosure best practices. In 2014, most Canadian jurisdictions (ie, provinces and territories; see 1.2 Corporate Governance Leg- islation and Regulation ) adopted requirements that non-venture Canadian public companies disclose their policies and targets for female representation on their boards and in executive officer positions, as well as the number and proportion of women in those roles. In 2021, Canadian public companies gov - erned by the CBCA became required to disclose pre - scribed information regarding “designated groups”,
being women, Indigenous People, members of vis - ible minorities and persons with disabilities. In 2023, the CSA published alternative amendments for public comment that could impose additional corporate gov - ernance disclosure requirements regarding persons from specifically identified groups. Overall, corporate governance disclosure requirements and best prac - tices in Canada continue to evolve. 5.3 Incorporation and Registration The registry filings required by a Canadian company are as prescribed by the company’s governing cor - porate statute. For example, under the CBCA these include (i) an annual return detailing the company’s registered office address, directors, and officers; and (ii) prompt filing of any changes to information included in an annual return. Failure to comply with these filing requirements can result in penalties, administrative dis - solution or other adverse consequences. As of 2024, CBCA companies must file information regarding indi - viduals with significant control over the company, some of which information will be publicly available. 5.4 Global Anti-Money Laundering Canada’s principal anti-money laundering legislation is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The main applicable enforce - ment agency is FINTRAC (Financial Transactions and Reports Analysis Centre of Canada). The key requirements imposed on “reporting entities” (being those companies that are directly subject to the Act) include implementing a risk-based compli - ance programme, client identification and “know your client” requirements (eg, beneficial owners and politically exposed persons), mandatory reporting requirements (eg, suspicious transactions and large virtual currency transactions), and record-keeping and (potentially) information production obligations. Significant monetary penalties can result from non- compliance, including up to CAD40,000 for minor violations, CAD4 million for serious violations, and CAD20 million for very serious violations. Notably, a very serious violation includes failure to adopt a com - pliance programme that is “reasonably designed, risk-based and effective”. If a company commits an offence under the Act, any director (or officer) of
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