Canadian commercial law generally recognizes two forms of partnerships: the general partnership and the limited partnership. The partnership statutes of most Canadian provinces now recognize a third variant, the limited liability partnership.
In a general partnership, subject to the partnership agreement, all partners may take part in the management of the partnership business. Every partner is an agent of the firm and of the other partners for purposes of the partnership business, and every partner is liable jointly with the other partners for all debts and obligations of the firm incurred while the person is a partner.4 There is no requirement that a general partnership register or take formal steps for the partnership relationship to exist, although the partners will typically want to formalize the arrangement through a written partnership agreement
A limited partnership is sometimes referred to as a “creature of statute” because a partnership cannot be a limited partnership without the partnership being formed under a statute, such as the Ontario Limited Partnerships Act.5 A limited partnership must have at least one general partner and at least one limited partner, but provided that the limited partner does not take part in the control of the partnership business, the limited partner is afforded limited liability.
The limited liability partnership (LLP) is a relatively new creature of statute that should not be confused with the limited partnership.6 Under the laws of most Canadian provinces, LLPs may be formed to carry on the business of certain professions, subject to the relevant regulatory regime. A partner in a typical LLP has a form of limited liability under which he or she is generally not liable for the negligent acts or omissions committed by another partner (or an employee under another partner’s supervision and control).
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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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Shared from: Bulletin for International Taxation
