Canada: Types of Company
A Partnership consists of two or more people coming together with the joint aim of pooling resources in order to trade under one umbrella business entity and make a profit. There is no requirement for a written agreement or contract between the partners.
Each partner must register for tax purposes, and must account for his or her share of the Partnership’s net income or loss on an annual tax return. However, the Partnership itself is not required to pay tax on its income, nor file an annual tax return. If there are six partners in the Partnership, though, the Partnership must file an annual Partnership Information Return.
It is also possible to establish a Limited Partnership, thus limiting each limited partner’s responsibilities and liabilities in a similar way to shareholders in a corporation. A general partner in a Limited Partnership will continue to have unlimited liability.