How to Perform UBO Checks in Canada: Complete 2025 Guide

UBO checks in Canada aren’t as complicated as they sound.

Ultimate Beneficial Ownership basically means finding out who really owns a company. Pretty straightforward concept.

The tricky part is that ownership can be layered. Company A might own Company B, which owns Company C. Or what if there are no UBOs? 

Whatever the case is, your job is to trace it back to actual people.

This guide covers the practical steps to get this done. You’ll learn what documents to request, where to look for ownership information, and how to document everything properly.

By the end of this, you’ll have a clear process you can follow every time.

Understanding UBO Requirements in Canada (What & Why)

In Canada’s context, an Ultimate Beneficial Owner (UBO) is any individual who owns or controls 25% or more of a business. In order to onboard or partner with any business, you are required to verify their UBOs. 

• For corporations, you need to identify anyone with 25% of the shares.
• For partnerships, you need to identify whoever has 25% ownership or control. 
• For trusts, you need to identify trustees, beneficiaries, and the people who set up the trust.

Here’s the thing, though: UBOs have to be actual people. 

You can’t just say, “ABC Company owns 30%,” and call it done. You need to dig deeper and find the real person behind ABC Company.

NOTE FOR DESIGNER: No details are there as to what’s considered minor, serious, and very serious. So, maybe that’s the only data we have. Maybe we can just have a “bar” or something.Common UBO Violations WHAT TRIGGERS PENALTIES ✗ Failing to obtain beneficial ownership information  ✗ Not confirming the accuracy of UBO data  ✗ Inadequate record-keeping (5+ years required)  ✗ Missing ongoing monitoring updates  ✗ No CEO verification when UBO is unavailable Section 2: Penalty Calculation HOW FINTRAC CALCULATES FINES Step 1: Base Penalty Complete failure = Maximum amount Partial failure = Proportional amount Step 2: Compliance History 1st time: -66% reduction 2nd time: -33% reduction 3rd+ time: Full penalty

This came into force on June 1, 2021, under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and expanded in 2024. This applies to you if you’re a: 

• Bank
• Casino
• Accountant
• Credit union
• Securities dealer
• Mortgage professionals
• Crowdfunding platforms
• Real estate professional
• Money services business
• Payment service providers

The whole point is removing anonymity. When someone’s trying to hide behind layers of companies, UBO checks cut through that and reveal who’s actually in control. 

Step-by-Step UBO Verification Process

If you’re dealing with hundreds or thousands of entities, manual UBO verification quickly becomes overwhelming. 

The following steps work for individual checks, but keep in mind that organizations handling volume typically need automated solutions to make this process sustainable. And fret not! After these steps, I’m also going to tell you a way to automate these verifications for those handling high volume (in the “Verification Methods and Data Sources” section).

Step 1: Trigger the UBO Check

UBO verification kicks in when you’re required to verify an entity’s identity under PCMLTFR. This happens during client onboarding, establishing business relationships, or for specific transactions, depending on your sector. 

You don’t choose when to do this. The regulations tell you exactly when it’s required.

Step 2: Check Official Canadian Registries First

Since January 22, 2024, all business corporations under the Canada Business Corporations Act must file beneficial ownership information with Corporations Canada. 

Start with Corporations Canada’s online search tool, where you can find ISC (Individuals with Significant Control) information, including full legal names, dates of control, and descriptions of significant control. This gives you a solid foundation before digging deeper.

Step 3: Identify Entity Type and Requirements

An ISC owns, controls, or directs 25% or more of shares individually, jointly, or in concert with others or has control, in fact, over the corporation without owning any shares. For corporations, you need director names plus 25%+ shareholders. Trusts require trustees, beneficiaries, and settlors. Other entities need anyone with 25%+ ownership or control.

Step 4: Collect and Cross-Reference Information

Gather the required ownership structure information from multiple sources. The ISC register contains full legal names, dates of birth, citizenship, tax residency, addresses, and descriptions of significant control. 

Cross-reference this with what the entity provides directly and any publicly available information.

Handling Complex Structures and No-UBO Scenarios

Well, this was meant to be step five of the process I shared above. But I am keeping this as a separate section since there can be multiple scenarios, and I wanted to give you a snapshot of all commonly occurring cases properly. 

1. Multi-Layered Ownership Chains

When Company A owns Company B, which owns your client entity, you need to trace back through each layer until you reach actual individuals. 

If a trust owns or controls 25% or more of the corporation’s shares, the individuals in control of the trust are each considered to be ISCs and must be listed in the corporation’s ISC register. This means looking at trustees, beneficiaries, and anyone with authority to control the trust.

2. Joint Ownership Scenarios

Sometimes, multiple people collectively own 25% or more. In cases of joint ownership of a significant number of shares, each individual in the group must be listed in the ISC register. You can’t just identify the group – you need each person’s details.

3. Trust Structures and Control

Trusts add complexity because control doesn’t always equal ownership. Having control over a trust means having authority to direct or influence the management of the trust, including directing how a trustee manages shareholders’ rights, such as the right to appoint or remove trustees, direct distribution of funds, direct investment decisions, amend the trust document, or terminate the trust.

4. “Control in Fact” Without Ownership

Some individuals have significant influence without owning shares. An individual with significant control has influence over a corporation, which amounts to “control in fact,” also known as “de facto control.” 

The ISC’s influence has the capacity to affect the economics, operations, and day-to-day management of the corporation.

5. When No UBOs Exist

In a small number of unusual situations, a corporation will either have no ISCs (for example, all individuals own or control less than 25% of the shares) or be unable to identify any ISCs. You still need to document the steps you took to reach this conclusion and maintain records of your investigation process.

Verification Methods and Data Sources

You’ve identified who needs to be verified, but now comes the real work: actually confirming the accuracy of beneficial ownership information. FINTRAC requires you to take “reasonable measures” to verify what you’ve collected, and these measures can’t be the same ones you used to obtain the information in the first place.

The challenge is that ownership structures aren’t static. People buy and sell shares, trusts get restructured, and corporate hierarchies change. 

What was accurate last month might be completely wrong today. Plus, when you’re dealing with complex multi-layered ownership or trying to verify hundreds of entities, traditional verification methods quickly become a bottleneck.

Manual Verification Sources	Digital Verification Methods
Minute books and corporate records	Open-source database searches
Securities registers and shareholder certificates	Commercially available information platforms
Articles of incorporation (physical copies)	Online corporate registry searches
Annual returns filed with provincial registries	Digital document verification services
Shareholder agreements and partnership docs	Real-time regulatory database access
Board meeting records and resolutions	Automated cross-referencing tools
Trust deeds and legal documents	Electronic validation systems

Manual verification gives you detailed, authoritative information, but it’s slow and labor-intensive. Digital searches are faster but still require someone to manually check multiple databases and piece together ownership chains. 

Both approaches struggle when you need to verify ownership across multiple jurisdictions or track changes over time.

That’s where APIs can reduce your hassles. 

Instead of manually checking Corporations Canada’s ISC database, provincial registries, and commercial databases, APIs can query all these sources simultaneously. They trace through corporate layers automatically and identify beneficial owners in real time. 

Getting Started With UBO Verification Automation

Signzy’s UBO Verification API exemplifies this approach by mapping complex ownership structures automatically and identifying real individuals in control, even when businesses are structured to obscure ownership. The system integrates with Canada’s official registries and commercial databases to provide comprehensive verification workflows that satisfy FINTRAC’s reasonable measures requirements while dramatically reducing processing time.

Schedule a quick demo to explore the platform to see how automated UBO verification works in practice.