Methods for Verifying Identity - Lawyer (2024)

Individuals

Licensees can verify the identity of an individual using one of the five following verification methods:

• Government-issued photo identification method
• Credit file method
• Dual process method
• Virtual verification with authentication method
• Using anagent method

Note:that there are different verification requirements for individuals younger than 15 years of age. For more information, consult the below Frequently asked questions.

Organizations

The verification requirements for anorganizationdepend on the type of organization.

• 1. Organization created or registered pursuant to legislative authority

  For an organization that is created or registered pursuant to legislative authority (e.g., a corporation or society), licensees must obtain written confirmation from a government registry of the organization’s existence, name, and address, as well as the names of the organization’s directors, if applicable.

  Example: Written confirmation may include a certificate of corporate status or a record filed annually under provincial securities legislation (e.g., organization’s published annual report signed by an audit firm)

• 2. Organization not registered in any government registry

  If the organization is not registered in any government registry (e.g., a trust or partnership), you must obtain a record confirming the organization’s existence.

  Example: This record could be a copy of the organization’s constating documents or articles of association

Note, where you are required to verify the identity of an organization, subject to anexemption, you must also:

• verify the identity of each individual authorized to instruct the organization using one of the methods of verification for individuals discussed above
• comply with thesource of fundsandmonitoringrequirements, and
• obtain information about the directors,beneficial owners, control, and structure of the organization. For more information, see the questions below.

Frequently asked questions

For the purposes of these FAQs,bolded termshave the meaning ascribed to them underBy-Law 7.1and the Law Society’sGlossary of Defined Termsfor the anti-money laundering andterrorist financingrequirements. Licensees should review the definitions in the by-law and the glossary prior to consulting these FAQs.

a. Individual

• 1. When do I have to verify the identity of an individual?

  You are required to verify the identity of an individual immediately (i.e., as soon as possible) after engaging in or giving instructions in respect of the receipt, payment, or transfer offunds.As a best practice, however, you should verify an individual’s identitybefore or whenyou first engage in such activity.

  See Also

  Uploading proof of your identity for a basic check

• 2. How do I verify the identity of a minor?

  The verification requirements for minors depend on the age of the individual.

  • Younger that 12 years old

    You must verify the identity of the individual’s parent or guardian using one of the following methods:

    • Government-issued photo identification
    • Credit file
    • Dual process
    • Virtual verification with authentication
    • Using anagent
  • 12 years or older but younger than 15 years

    You may verify identity by obtaining information from areliable sourcethat contains the name and address of the individual’s parent or guardian and confirming that the address of the parent or guardian matches the individual’s address.

  • 15 years or older

    For individuals 15 years or older, you can verify identity using any of the five available methods of verification for individuals as set out above.

• 3. My client is a minor under 12 years of age. The by-law requires that I verify the identity of my client’s parent or guardian. Am I also required to verify or confirm the parent-child or guardian-child relationship?

  Although you are not required to do so under the by-law, to reduce the risk that you may be assisting in or encouraging fraud or illegal conduct, it is a best practice to obtain information or records that confirm the existence of the child-parent/guardian relationship. This may include, for example, requesting a copy of the minor client’s birth certificate, adoption order, or religious records (e.g., baptismal certificate).

• 4. I am a licensee in Ottawa and my client is an individual in Calgary. I am required to verify the identity of my client, but I will not be able to meet with the client in person. How do I verify my client’s identity?

  When your client is an individual and is in Canada, but you cannot meet with them in person, you
  can use any one of the following methods to verify their identity:
  

  • Credit file method
  • Dual process method
  • Virtual verification with authentication method
  • By using an agent to verify the individual’s identity

• 5. When do I have to verify the identity of an organization?

  For an organizational client or third party, you must verify the identity of theorganizationwithin 30 days afterfirst engaging in or giving instructions in respect of the receipt, payment, or transfer offunds. As a best practice, however, you should verify identity before or when you first engage in such activity.

• 6. By-Law 7.1 talks about obtaining additional identification information about directors, beneficial owners, and the organization’s ownership, control, and structure. What is required?

  When you are required to verify the identity of anorganization, you must also:

  • obtain and keep a dated record of the name of each director of the organization (unless the organization is asecurities dealer), and
  • make reasonable efforts to obtain the names and addresses of allbeneficial owners, and information establishing the ownership, control, and structure of the organization.

  
  You are also required to take reasonable measures to confirm the accuracy of the above information and keep a dated record of the information and the measures taken. All documents relied on must be authentic, valid, and current, and information obtained must be valid and current.
  
  To assist you in documenting compliance with these requirements, consider using the Law Society’sClient verification form (organization).

• 7. Where can I find information establishing beneficial ownership as well as information on the control and structure of the organization? How do I confirm the accuracy of this information?

  You can obtain information establishing beneficial ownership and the ownership, control, and structure information from theorganizationdirectly, either verbally or in writing. For example, the organization can provide you withofficial documentationor advise you on the beneficial ownership which you can then document forrecordkeepingpurposes (for example, the Law Society’sClient verification form (organization)). It isnotsufficient to identify only the owners of an organization or those who control it; you must make reasonable efforts to identify both.
  
  If you are relying on documents or records, it may be possible to rely on such documents or records to satisfy both the requirement to obtain information about beneficial ownership, and the ownership, control, and structure of the organization, and to confirm the accuracy of such information.

  In all cases, you must use your judgment to assess whether the documentation is appropriate. Where possible, official documents should be used to confirm beneficial ownership information. If no official document exists, consider having the client sign an attestation that includes the ownership, control, and structure information obtained.

• 8. What is the “reasonable efforts” standard referred to in the by-law?

  The reasonable efforts standard requires you to apply sound, sensible judgment about the measures you take to identifybeneficial owners and the ownership, control, and structure of theorganization.
  
  In making reasonable efforts to determine beneficial ownership, it is important to understand that the names on legal documentation may not be the actual owners of an organization. You must assess and determine what is appropriate for each situation to ensure the accuracy of the information obtained, while also considering the risk associated with providinglegal servicesto the client.

• 9. What should I do if I am unable to obtain information on the directors and beneficial owners?

  If you are unable to obtain the information required about the directors andbeneficial ownersof theorganization, or you are unable to confirm the accuracy of such information you must

  • take reasonable measures to ascertain the identity of the most senior managing officer of the organization
  • determine whether the client’s information in respect of their activities,source of funds, and instructions are consistent with the purpose of the retainer and the information obtained about the organization, and prepare a dated record of your determination, and
  • assess the organizational client’s activities in the context of any risks that thefinancial transactionmay be used to facilitate dishonest, fraudulent, criminal, or other illegal activity.

  
  To assist you in identifying and assessing risks associated with the client, matter, or transaction, consider using the Law Society’sWorksheet: Red flags of fraud, money laundering, terrorist financing, and illegal activity.

  You may also use the Law Society’sClient verification form (organization)to record the reasonable measures taken to ascertain identity and document your risk assessment.

• 10. My client is a partnership that is unable to provide me with a copy of the partnership agreement. What should I do?

  If you are required to verify the identity of anorganizationthat is a partnership, you must obtain a record that confirms its existence as an organization. Obtaining the partnership agreement is only one way to verify the client’s identity. Other examples may include conducting a partnership registration search or confirming the GST/HST number of the partnership.
  
  In all cases, the records used must be authentic, valid, and current and you must retain a copy of them in your file in accordance with yourrecordkeepingobligations. If the client refuses to provide a copy of the partnership agreement and you are unable to obtain information from otherreliable sources, you must decline to act or stop acting for the client.

• 11. I am acting for a trust. How do I verify its identity?

  To verify the identity of a client orthird party that is a trust, you must obtain a copy of a record that confirms the existence of the trust as anorganization. The type of record will vary depending on the nature of the trust. Examples of appropriate documentation may include a trust agreement or other documents establishing the trust, documents amending the trust, and documents identifying the trustees. You are also required to verify the identity of all individuals authorized to give instructions on behalf of the trust using one of the five verification methods discussed above.
  
  If you are required to verify the identity of an organization that is a trust, you must also comply with additional identification requirements. For more information on these requirements see the Law Society’sClient identification and verification flowchart.

• 12. My client is a corporation or a partnership. Do I have to verify its identity again if I have already done so?

  It depends. If the verification complied with the current requirements and you believe the information is current and accurate, you are not required to verify identity again. If the verification did not comply with the current requirements or you believe that the information may no longer be accurate or current, you must verify identity again.
  
  In all cases, it is recommended that you exercise due diligence in ascertaining whether there has been any change in the identity, ownership, control, or structure of theorganizationand in determining that the instructing individual is still authorized to act in that capacity.
  
  In addition, because you are engaged in or giving instructions in respect of the receipt, payment, or transfer offunds, you must ensure you obtain information aboutsource of funds. If the matter is ongoing, you must periodically monitor the professional business relationship with the client throughout the retainer. For more information on your source of funds andmonitoringobligations, see the Law Society's Source of funds requirementandMonitoring requirementresources.

• 13. I have acted for a corporate client on several matters and have complied with the identification and verification requirements. Someone new is now giving me instructions on behalf of the client. Do I have to verify that person’s identity?

  Yes. In every case where you are engaged in or giving instructions in respect of the receipt, payment, or transfer offunds, you must verify the identity of each individual who is authorized to give you instructions on behalf of theorganizationin respect of the matter for which you have been retained. You may, however, be exempt from this requirement if you previously verified the identity of that individual and have no reason to believe the information or the accuracy of the information has changed.

Related resources

Licensees may also wish to consult the following Law Society resources:

• Glossary of defined terms (AMLTF)
• Client identification and verification requirements
• Client identification and verification flowchart
• Examples of reliable sources of information
• Client verification form (Individual)
• By-Law 7.1

Support

For additional questions about the different methods for verifying a client’s identity, contact the Law Society’sPractice Management Helpline.

Last updated: January 1, 2024