A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, each partner is not responsible or liable for another partner’s misconduct or negligence. The Canadian Partnership Act 1996 provides the option of registration of limited liability partnerships (LLP), where the partners are equalized in limitation of their personal liability for obligations of partnership.
Canada Limited Liability Partnership Key Features
- The Canadian LLP has no separate legal personality but has some its features (it can open bank accounts, make transactions with contract partners in the course of its business).
- Partners in LLP are not liable for the partnership’s obligations (like shareholders in a corporation). A partner however may be personally liable in case of his own negligent or wrongful act or omission (like directors in a corporation).
- LLP registered in Canada can engage in different types of business including trade in goods and rendering services, and is not limited only to self-regulated professions (legal, accounting and similar services) that is in place in other provinces.
- LLP must have an address in Canada.
- LLP must file annual report to the registrar within 2 months after expiration of each year from the date of its registration as LLP.
- The partnership must maintain the list of its partners which must be available for inspection and copying during working hours.
- Like the other types of partnerships, LLP is transparent for the tax purposes – the taxation is performed at the level of partners at the place of their tax residence.
Canada Limited Liability Partnership Legal Requirements
Canada Limited Liability Partnership
Limited Partnership (LP)
Share capital or equivalent
Directors | Officers | Partners
2 (1 limited partner, 1 general partner)
Yes (1 general partner/director)
Canada Limited Liability Partnership Tax Treatment
Partners who are non-residents of Canada usually have no tax liability in Canada.
Canada Limited Liability Partnership Duration or Set up
Around 2 Weeks
Canada Limited Liability Partnership Distinctive Benefits
- Fairly easy and inexpensive to form a partnership
- Start-up costs are shared equally with you and your partner(s)
- Equal share in the management, profits and assets
- Tax advantage — if income from the partnership is low or loses money (you and your partner(s) include your shares of the partnership in your individual tax returns)
- Separate legal status;
- Limited liability protection for its partners;
- Transparent for taxation purposes; and
The Valsen Advantage
- End to end comprehensive service
- Speedy and efficient service
- Expert advice on structuring options
- Dedicated ongoing compliance support
- Extensive network pool of service providers
[/vc_column_text][/vc_column][vc_column width=”1/3″][vc_custom_heading text=”Scotlanf Offering” font_container=”tag:h3|text_align:left” use_theme_fonts=”yes”][vc_empty_space height=”15px”][vc_widget_sidebar sidebar_id=”canada”][/vc_column][/vc_row]