What ownership or voting threshold makes someone an individual with significant control under the CBCA and OBCA?
Both Ontario's Business Corporations Act and the equivalent federal corporate statute use a similar approach: an individual becomes an individual with significant control if they own, control, or direct a fixed percentage of the corporation's outstanding shares or voting rights, set out in the legislation itself, either alone or together with others who agree to exercise those rights jointly. The specific percentage is a defined legal threshold rather than a rough guideline, so it's worth confirming the current wording directly rather than relying on an approximate figure.
Meeting that ownership or voting threshold isn't the only way to qualify. Someone can also be an ISC by having the right to elect, appoint, or remove a majority of the board, or by exercising significant influence over the corporation in practice even without a formal ownership stake reaching the threshold, for example through a controlling agreement or arrangement.
Because Ontario private corporations and federally incorporated corporations are both subject to a version of this regime, and the underlying test is broadly aligned between the two statutes, businesses operating both provincially and federally shouldn't assume the requirement applies to only one of them.
Key takeaways
- Both the OBCA and the federal corporate statute define a specific ownership or voting threshold for ISC status.
- Confirm the exact current threshold rather than relying on an approximate figure.
- Board-control rights and significant influence in practice can also create ISC status without reaching the ownership threshold.
- The regimes are broadly aligned, so both provincially and federally incorporated corporations need to comply.