Overview: Setup a Limited Partnership in Ontario
In Ontario, limited partnerships combine corporate liability protection with partnership flexibility. Unlike corporations, they continue to exist despite partner changes. They are, nonetheless, able to engage into contracts and own property. Limited liability partnerships, formed in 2008, contain aspects of both corporations and partnerships. Partners’ liability is restricted to their agreed-upon payments, but the partnership is still responsible for its debts. Both forms of partnerships are controlled by separate agreements that define partner rights and responsibilities.
Read More: Company Registration in Canada
How to Register a Limited Partnership in Ontario, Canada?
The following steps to register a limited partnership in Ontario, Canada includes:
- The first step to register a limited partnership in Ontario is to choose a unique name for your limited partnership. Name should be unique, ethical and registered with the Ontario Business Registry.
- The second step is to prepare a legal partnership agreement which provides roles of the general partners (who manage the business and have unlimited liability) and limited partners (who contribute capital and have limited liability).
- The third step is to file a declaration of limited partnership. The application form must be filled correctly and submitted to the Ministry of Government and Consumer Services. You can file online through ServiceOntario. The declaration includes information about the partnership name, partners, principal place of business, and other relevant details.
- The fourth step is to pay the registration fee. After submitting your application form, you need to pay the registration fee to the Service Ontario.
- The fifth and final step is to obtain a business number. You need to register with the Canada Revenue Agency to obtain a business number for tax purposes.
Documents required to Incorporate a Limited Partnership in Ontario
The following documents required to register a limited partnership in Ontario are:
- Partnership agreement
- Registered office address
- Identity cards or valid passports of the partners
- Name check certificate
- Notary deed
- Power of attorney
Advantages of Limited Partnership in Ontario
The list of advantages of limited partnership in Ontario includes:
- Limited Liability: Partners are generally not personally accountable for the partnership’s debts or liabilities that exceed their agreed-upon contributions.
- Flexibility: They provide more flexibility than corporations, with less formal obligations and a more straightforward structure.
- Partnership Structure: Unlike corporations, limited partnerships are not separate legal entities. They are formed by a partnership agreement that outlines the rights and responsibilities of the partners.
- General and Limited Partners: Limited partnerships typically have two types of partners: general partners who manage the business and are personally liable for its debts, and limited partners who invest in the business but have limited liability.
Conclusion
Selecting a partnership name, creating a partnership agreement, making a declaration of limited partnership, paying a registration fee, and acquiring a company number are all essential elements in the process of registering a limited partnership in Ontario. Even though it might appear simple, it’s crucial to speak with tax and legal experts to make sure that all relevant rules and regulations are followed. You can create your limited partnership and take advantage of its advantages by carefully following these steps and consulting an expert. Contact OnDemand International’s experts to set up your limited partnership in Ontario.
