What Is the Difference Between an Incorporated Entity and a Limited Partnership?

An incorporated entity, such as a corporation, and a limited partnership are two business structures an individual can operate his business as. There are differences between the two structures, including how they are managed and taxed and how they protect owners from liability. A corporation requires more paperwork filings to open than a limited partnership. However, an LP, which is a variation of the general partnership structure, needs at least two partners while a corporation can operate with a single owner.

A limited partnership is registered in Canada by filing a Declaration under the Limited Partnerships Act. Limited partnerships are a special type of partnership that consists of at least one general partner and one or more limited partners. Subject to the Limited Partnerships Act, general partners have unlimited liability, while limited partners have limited liability up to the amount they contribute or agree to contribute to the limited partnership.

Separate Entity

The law treats corporations as entities separate from their owners. Corporations file their own taxes, pay bills and salaries and purchase company equipment. They can also file for bankruptcies and be sued by third parties. Limited partnerships, on the other hand, are not treated as separate entities from their owners.

Company Operations

Corporate operations are more complex than LPs. Corporations are run by elected officials; they are elected by shareholders at special or annual meetings. Shareholders who cannot make the meetings cast votes via proxy, which is through members of corporate management. This and other provisions must be followed by companies to keep their corporate status. Limited partnerships must have at least a general partner, who manages the business, and a limited partner, who has made an investment in the partnership but isn’t involved in the day-to-day operations.

Benefits of Canadian limited partnerships for Non-Canadian Residents

Limited Partnerships are a simple form of business registration in Canada, which creates a Canadian company. One of the major benefits of limited partnerships is that Canadian limited partnerships do not generate filing and tax obligations in Canada for partners, who are not residents of Canada.

We Register Canada Limited partnerships 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 $2000 (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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