Canada: Types of Company
This page was last updated on 5 June 2019.
A partnership consists of two or more people coming together 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 or more 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.