Canada Limited Partnerships are a species of partnership in respect of which a declaration has been filed in accordance with the Limited Partnerships Act, LP Act). It must be formed between two or more persons and carry on a business in common with a view to profit.
A Canadian Limited Partnership broadly resembles a general partnership under the Partnership Act, except that an LP has two categories of partners:
General partners.
Each LP must have one or more partners who have responsibility for managing the LP’s business and have unlimited liability for the firms’ debts and obligations.
Limited partners.
An LP must also have one or more limited partners who:
- will invest capital in the LP;
- are not to take an active role in the LP’s operation; and
- enjoy limited liability up to the amount of capital that they have contributed or agreed to contribute to the LP (less what they have already contributed).
Limited Partnerships in Canada are governed by a relatively light statutory and regulatory regime as compared to corporations.
Canada Limited Partnership Formation Checklist
This Checklist summarizes issues to consider, and steps to take, when forming a limited partnership (LP). While this Checklist covers the principal issues involved in forming an LP, each province and territory has its own statutory requirements that must be reviewed and satisfied.
1. Select the Province or Territory of Formation
2. Choose a Partnership Name
- The name must satisfy statutory requirements in the province or territory of formation.
- Check whether the name is available in the province or territory of formation and any other jurisdictions where the LP may need to be registered as an extra-provincial LP to carry on business.
- If the name will be used as a domain name or trade-mark, consider running a separate search (such as a trade-mark search) to look for similar names in the marketplace.
3.Draft the LP’s Declaration
The declaration of the LP must satisfy statutory requirements in the province or territory of formation.
4. File the LP Declaration
5. Draft the LP Agreement
Limited Partnership Agreements includes the following information:
- the partners’ rights under the LP;
- management of the LP;
- the capital contributions of the partners;
- allocation of profits, losses, and distributions;
- the admission of new limited partners; and
- the dissolution and winding up of the LP.
6. Apply for a business name (BN) from the Canada Revenue Agency (CRA) for the LP. An LP is not a taxpayer for purposes of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) but will generally need to be a registrant for purposes of goods and services tax (or, in Ontario and the Atlantic provinces, harmonized sales tax) under the Excise Tax Act, R.S.C. 1985, c. E-15.
Canada Limited partnership registration in 24 Hours
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 uniqueness of the name
- Government registration fee
- Registered office address for one year
- Declaration Form 3 confirming the 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
