Effective October 1, 2025, Canadian anti-money laundering (AML) reporting entities regulated by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) are required to report to Corporations Canada any material discrepancies identified between the beneficial ownership information that they have obtained and that is listed in Corporations Canada’s database.
Background
This requirement was introduced to enhance the reliability of beneficial ownership information available to authorities and the public, and to reduce the opportunities for misuse of Canadian corporate structures in money laundering, tax evasion, and sanctions avoidance schemes. Since the usefulness of the beneficial ownership information depends on the accuracy of the information, amendments under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) now will require reporting entities to flag material discrepancies between the information provided by a corporation incorporated under the Canada Business Corporations Act (CBCA) and what is recorded in the registry, thereby supporting Corporations Canada in maintaining an accurate database.
A “material discrepancy” exists where beneficial ownership information collected by a reporting entity substantively contradicts what is publicly disclosed. While the regulations give limited guidance, missing beneficial owners are considered material, while minor typographical errors are not. Currently, the definition of “material” remains imprecise, which may create some uncertainty for compliance teams.
Who Must Comply
The requirement applies to reporting entities who have the existing obligation to take reasonable measures to confirm the accuracy of beneficial ownership information when they first obtain it and in the course of conducting ongoing monitoring of their business relationships.
Discrepancy reporting applies only to CBCA corporations that are active on the Corporations Canada registry.
When to Report
Reporting entities are required to report a material discrepancy to Corporations Canada within 30 days after the day on which it is identified when the following criteria are met:
- A client is an active CBCA corporation; and
- The reporting entity determines that the corporation is high-risk for money laundering, terrorist financing, or sanctions evasion; and
- When there is a material discrepancy in beneficial ownership information that is not resolved within 30 days. Note there is no requirement to address the material discrepancy directly with the customer.
In these cases, reporting entities must check the Corporations Canada registry when a high-risk relationship is first identified and continue to check during ongoing monitoring of that high-risk business relationship.
If a previously reported discrepancy is identified again (i.e., during the course of ongoing monitoring) and it has not been resolved, it must be reported again. If there are other issues related to corporate status or registry info (not beneficial ownership information), this information can still be reported to Corporations Canada, but it must be done so separately. Voluntary reporting is permitted if the client is considered low-risk, but discrepancies are still found.
Reporting Steps
Reports are submitted through Corporations Canada’s online portal (accessed through the registry). The process is as follows:
- Ensure your reporting entity is registered for FINTRAC Web Reporting (FWR), and that the individual completing the reporting has an active My ISED account with Corporations Canada.
- Search the corporation on the Corporations Canada website to confirm it is an active CBCA corporation.
- While in Corporations Canada’s online portal, from the page connected to the corporation about which the discrepancy is being reported, select “Report an Issue” (currently a link at the bottom right of the page). This will prompt a My ISED login.
- Complete the discrepancy form with:
- Reporting entity details (legal name, RE number, location, compliance contact/email). This information will auto-populate after the first report.
- Corporation details (name and incorporation number for the company you are reporting on).
- Selecting the reason for reporting a discrepancy (reporting as required under PCMLTFA or voluntary).
- Discrepancy details (nature of inconsistency, date identified).
- Review the information for accuracy and submit the report.
- A confirmation screen will appear, including a reference number
- Corporations Canada will validate the report and issue an acknowledgment within 10 business days.
- Keep a copy of the acknowledgement as evidence of the completed discrepancy reporting.
- If the discrepancy has not been resolved by the next time you complete periodic monitoring for the entity, the process is repeated.
For more detailed steps on reporting, you may refer to the guidance on submitting a beneficial ownership discrepancy report or the following Corporations Canada demo video, which together provide a comprehensive overview.
Note that inaccurate or incomplete reporting entity information will result in an invalid Beneficial Ownership discrepancy report. Amendments to submitted reports are currently not possible, and a new report will have to be submitted.
Reporting entities must retain the report acknowledgment and other supporting documentation as evidence of meeting obligations.
We’re Here To Help
If you would like assistance in understanding what these changes mean to your business, or if you need help updating your compliance program and processes, please get in touch.