The Canada Limited Partnership is run by the single general partner with majority ownership. A limited partnership has relatively few operational formalities, low-to-mid-range administration costs and clear rules for raising capital.
Accounting of Canada Limited Partnerships
Revenues, expenses and cash flow management are all tracked internally with additional outside support for other accounting functions.
Taxation Of Canada Limited Partnership
- There is no need to file a separate tax return for the partnership. Each partner is taxed personally on his/her share.
- Canada Limited Partnership is not considered as a taxable entity. Therefore, Canada Limited Partnerships are not required to file corporate tax returns and pay any income taxes.
- All profit received by a Canada Limited Partnership passes through the company to its partners. Partners, who are not Canadian residents do not have tax liabilities in Canada. If a partner is a Canadian resident, he is required to include his part of profit received through his Limited Partnership into his personal tax return and pay personal income tax.
- There is no withholding tax on the profit passed to partners, who are non-Canadian residents.
- There are no audit requirements for Limited Partnerships.
Legal Liability in a Canada Limited Partnership
The general partner is liable for the full assets and liabilities of the partnership.
Pros and cons of Canada Limited Partnerships
- Important decisions are made by the general partner, with the limited partners kept informed.
- Public reporting is not required. General-purpose financial information is needed to run the company and satisfy the needs of bankers, vendors, tax collectors, and the limited partners.
- A limited partnership has some limits on expense deductions. Taxable income is subject to the personal tax rates of the individual.
- Limited exposure to limited partners is an advantage. Only the personal assets of the general partner can be seized to settle legal claims.
Canada Limited Partnership Registration Service
Company Formations offers Canada Limited Partnership Registration to Canadian residents and non-Canadian residents. Our Canada Limited Partnership registration service for Only $2200 (all inclusive) Includes:
- Name Search confirming the uniqueness of the name
- Government registration fee
- Registered office address for one year
- Declaration Form 3 confirming registration of the Limited Partnership
- Organizational Resolutions of the General Partners
- Resolution Admitting of Limited Partner
- Partnership Agreement
- Register of General Partners
- Register of Limited Partners
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