How a federally incorporated company opens an account under FinTRAC rules

What to take away

What FinTRAC requires before a federally incorporated company can be verified

FINTRAC is the Financial Transactions and Reports Analysis Centre of Canada. It sets the identity verification and record keeping duties that banks must follow when they open an account for a business.

Those duties come from the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which is the statute behind most of the paperwork you will be asked to sign.

The bank is the reporting entity, not FINTRAC. That matters when you are arguing about a document. The bank decides what it needs to satisfy its own compliance program, and FINTRAC supervises how well it does that. A branch employee has little discretion to waive a requirement, and asking for an exception usually just adds a week.

For a federally incorporated company, the bank must identify the corporation as an entity and then identify the people behind it. That second part is where most delays happen. Directors, signing officers and anyone who controls the company through ownership or other means all sit in scope.

If you are still assembling the file, build the base layer of personal identity documents first, then add the corporate documents on top. For worked cases, see five invented account opening cases.

What the bank needs to see

The corporation must be verified by name, address and incorporation number. The bank will also want to know what the company does, where it operates and who its customers are. A federally incorporated company that sells software to hospitals looks different to a compliance officer than one that moves funds for unrelated third parties.

Expect questions about the source of the initial deposit. This is not personal. A deposit that does not match the stated business activity is one of the triggers a bank watches for.

Timing

FINTRAC sets the time limits for verification in its guidance, and they differ by the type of person or entity, so check the current deadline there. In practice, banks complete it before the first transaction. Bring the documents to the first meeting rather than promising them later.

The steps, in order

Most banks ask for a certified copy of the resolution, signed by a director or the corporate secretary. It is the document that gives the signing officers authority over the account. Without it, the bank has no proof that the board approved the account.

Identity documents for the corporation versus identity documents for its directors

These are two different files and they are checked against different rules. Mixing them up is the most common reason an application stalls.

For the corporation, the bank uses the entity method. It confirms the corporation exists, records its name and address, and records its incorporation number. A certificate of incorporation or a recent corporate profile from the federal register does this job.

For each person, the bank uses the method for verifying a person. FINTRAC publishes the acceptable options in its guidance on Methods to verify the identity of persons and entities.

Read that page before you photocopy anything, because a document that is not on the list will not be accepted no matter how official it looks.

The three methods that matter at the counter

The first is the government photo identification method. A current Canadian passport, a provincial driver's license or a provincial photo card works. The bank checks the photo, the name and the expiry, and records the document type, number and issuing jurisdiction.

The second is the credit file method. The bank matches the person's name, address and date of birth against a credit file that has existed for at least three years and draws on more than one source. This is common for directors who bank elsewhere and do not want to hand over a passport copy.

The third is the dual process method. It combines two independent reliable sources, such as a utility bill showing name and address and a bank statement showing a deposit account in the person's name. It suits non face to face openings, so remote account opening for a corporation incorporated in another province often runs this way.

A certified check, a business card or a health card alone does not verify identity. Neither does a document in a name that does not match the person in front of the officer.

What to bring

Build the personal side of the file first, then attach the corporate documents. An account opening checklist keeps the two streams from blurring together when several people are gathering paper at once, and the account opening questions that matter are worth reading beforehand.

The individuals with significant control register and beneficial ownership proof

Canada requires federally incorporated companies to keep a register of individuals with significant control. The register names the real people who own or control the company, not the holding companies or nominees that may sit above it. Corporations Canada explains the requirements on its page about Individuals with significant control.

Under the Canada Business Corporations Act, a person is an individual with significant control if they directly or indirectly own or control shares carrying 25 percent or more of the votes, or 25 percent or more of the fair market value of all shares. Direct or indirect influence that amounts to control in fact also counts. The corporation keeps the register itself and must update it at least once in each financial year. Since January 2024 it must also file the information with Corporations Canada, with its annual return and within 15 days of a change.

That register is a corporate law duty. FINTRAC's rule is separate. Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, the bank must obtain the names of all directors and of all persons who own or control, directly or indirectly, 25 percent or more of the shares. It must also record how the corporation is owned, controlled and structured, and take reasonable measures to confirm that information is accurate.

If the bank cannot confirm who the beneficial owners are, it must verify the identity of the most senior managing officer and treat the account as high risk. FINTRAC's guidance on beneficial ownership requirements sets this out in full.

Banks ask for this information because beneficial ownership is where shell structures hide, a theme covered in account opening mistakes before and after approval. If your company is owned by another company, the bank will keep asking until it reaches a natural person. A nominee director who takes instructions from someone else does not end the chain.

What the bank does with the register

It records the name, date of birth, address and jurisdiction of residence of each individual with significant control. It also records how control is held, whether through shares, voting rights or another arrangement.

Expect the bank to ask for corroboration. A share certificate, a shareholders agreement or a subscription agreement can support what the register says. If the register and the share certificates disagree, fix the register before you apply.

Common problems

A register that has not been updated after a share transfer is the most frequent defect. A second is a corporation with a single shareholder who is also the sole director, where the founder assumes no register is needed. It is still needed.

Where the ownership chain runs through a trust or an offshore company, allow extra time. The bank may need to escalate the file, and the reviewer may ask for documents you have not been asked for before.

If the owner lives outside Canada, the route to approval is longer and the document list is longer too.

How a provincial sole proprietorship differs from a federal corporation at the counter

A sole proprietorship is not a separate legal person. The owner and the business are the same in law, so the bank verifies the person and then records the business name and address. There is no incorporation number, no directors and no individuals with significant control register.

That makes the file shorter. It does not make it lighter. The owner carries unlimited personal liability, and the bank knows it. A sole proprietorship opened in Ontario, Alberta or British Columbia is registered provincially, sometimes under a trade name, and the bank links it to the owner's personal identity file.

For a federally incorporated company, the bank verifies the entity and then verifies the people. Two files, two sets of records, two retention clocks. The corporation also has a paper trail the bank can check independently through the federal register, which a sole proprietorship does not.

The practical differences

Where the provinces differ

Registration is provincial, so the office you deal with depends on where you operate. Ontario filings go through the provincial business registry, Quebec through the enterprise register, and British Columbia, Alberta and the Prairies each run their own. Atlantic Canada and the territories follow the same pattern with their own registries.

A sole proprietorship that later incorporates does not carry its bank relationship across automatically. The corporation is a new customer, and the bank will verify it from the start. Plan for that if you expect to incorporate within the first year.

Searching the federal corporation register to confirm status before you apply

Before you walk into a branch, confirm that your corporation is in good standing. Corporations Canada, part of Innovation, Science and Economic Development Canada, maintains the federal register and publishes the search tools on its Corporations Canada site.

If the profile shows a default, file the outstanding return and wait for the status to update before applying. A bank that verifies a corporation which is not in good standing creates a record it would rather not have.

What the profile does and does not prove

The profile proves the corporation exists, gives its number and lists its directors. It does not prove who owns it. Ownership comes from the individuals with significant control register and the supporting share documents, which is why the bank asks for both.

A numbered company with no operating history will face more questions than an established one. That is normal, and the answers are the same ones you would give an investor: what the business does, who pays it and where the money goes.

If the search does not match

Name changes, amalgamations and continuances all leave traces in the register. If your documents show an old name, bring the certificate of amendment or the articles of amalgamation. The bank needs the chain, not just the current state.

Records a bank must keep, and how long they must keep them

Record keeping is not paperwork for its own sake. It is what lets a bank show FINTRAC that it verified identity and understood the ownership of the account. The obligations sit on the bank, but they shape what you are asked to provide.

The bank keeps the identification records it used for the corporation and for each person verified. It keeps the account opening record, which captures the purpose of the account, the intended use and the expected activity. It keeps the beneficial ownership information it collected, including the individuals with significant control.

Large cash transactions and certain other transactions are reported separately, and those reports are kept as well. You will not see most of this file. You will see the requests that feed it.

How long

Identity and account records are generally kept for five years after the account is closed or the relationship ends. Transaction records follow their own five year clock from the date of the transaction. The bank, not the customer, is responsible for the retention.

That means a document you provided at opening may sit in the file for years after you leave. Ask how it is stored if that matters to you, and ask who inside the bank can see it.

What happens if you refuse

A bank that cannot verify identity cannot open or maintain the account. Refusing to provide the individuals with significant control information has the same effect. The requirement is not discretionary, and the branch has no way around it.

If a bank closes an account over missing verification, the record stays with the institution. Opening elsewhere means starting the verification process again from zero.

Where privacy law limits what the bank can ask for

The bank is a private organization collecting personal information, so federal and provincial privacy law applies. The Office of the Privacy Commissioner of Canada sets out the federal framework on its website.

The principle that matters at the counter is collection limited to what is necessary for the stated purpose. The bank needs identity and beneficial ownership information to meet its anti money laundering duties. It does not need your medical history, your religion or your marital status.

Provincial privacy law applies in some provinces for organizations operating there, including Quebec and British Columbia. The practical effect is similar: the bank must tell you why it is collecting information and must not collect more than the purpose requires.

Where the line sits

A request for a passport copy, a corporate profile and the individuals with significant control register is within the line. A request for the personal bank statements of a minority shareholder who is not a significant owner is closer to the edge, and you can ask what purpose it serves.

You can ask for the bank's privacy policy and for the name of the person responsible for privacy compliance. You can also ask that a document be viewed rather than copied where the rule allows viewing.

What privacy law does not do

It does not override the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Where the two meet, the anti money laundering requirement wins. A privacy complaint will not get an account opened without verification.

Comparing the routes

Different structures carry different verification loads. A sole proprietorship is the lightest, a federal corporation with a simple ownership chart is moderate, and a corporation owned through trusts or offshore entities is the heaviest. A comparison of what a business bank account can and cannot do across structures shows where the document burden lands.

Whichever route you take, the sequence is the same: verify the entity, verify the people, record the ownership, keep the file. Knowing which structure you have before you apply saves a second trip to the branch.

Common questions