General Partnership RegistrationCanada Partnership Registration. A general partnership is a group of persons, called “partners,” who, in a spirit of cooperation, agree to carry on a common activity. The partners of a general partnership operate an enterprise, contribute to it by sharing property, knowledge or activities and share any resulting pecuniary profits or losses.
Such a partnership is created through a partnership agreement and must be designated by a single name for all the partners, who are solidarily liable for the enterprise’s obligations and certain of its debts, independently of the respective shares of each partner in the partnership.
One of the primary reasons for registration of a Partnership is so the public can identify and locate the individuals involved in the business. A partner can be one of the following: an individual, corporation or other corporate entity such as a society, cooperative, etc.
Please select the jurisdiction where you want to register your partnership:
|Manitoba||Prince Edward Island|
A general partnership is more complex than a sole proprietorship but less complex than incorporation. Its basic features are as follows:
Features: General partnership includes joint ownership with some formalities and moderate administration expenses. The owners pool their funds to raise capital.
Pros and cons: Decision-making can be cumbersome, with important decisions made by voting among partners. Smaller decisions may be made individually as long as others are informed.
Features: Revenues, expenses and cash flow management are all tracked internally with additional outside support from other professional accountants.
Pros and cons: Public reporting is not required, but general purpose financial information is needed to run the company and satisfy bankers, vendors, tax collectors, etc.
Features: Each partner is taxed personally on his or her share of partnership income, so a tax return for the general partnership itself is not required.
Pros and cons: There are limits to what expenses can be deducted. Taxable income is subject to individual personal tax rates.
Features: Each partner is liable for all assets and liabilities of the partnership.
Pros and cons: If the company is sued, each partner’s personal assets can be seized to settle the claims.