Corporate / Commercial Law
The laws of Ontario recognize three different types of partnerships: General Partnership (GP), commonly refers to as “Partnership”; Limited Liability Partnerships (LLP); and Limited Partnership (LP). In Ontario, GP and LLP are governed by the Partnerships Act whereas LP have to satisfy the requirements of the Limited Partnerships Act. Each has pros and cons.
In a General Partnership, the liability of each partner for debts and other financial obligations of the partnership is unlimited.
In a Limited Partnership, there are two groups of partners. There are one or more General Partners whose liability is unlimited who tends to the day-to-day operation of the business; and one or more Limited Partners whose liability is limited to the amount they have contributed or agreed to contribute to the business. However, only silent investors are allowed to be limited partners, and they will lose their “limited liability” status if they are to get involved in the management or operation of the partnership business.
A Limited Liability Partnership is used by professionals who wish to have the protection of limited liability and yet enjoy the flexibility and the lack of legal formalities being required. Partners are liable only for their own negligence or the negligence of employees under their direct supervision and control. However, the law does not reduce or limit the liability of the firm. Most importantly only professionals such as lawyers, physicians, accountants are allowed to form LLP.
HTW Law will help you make an informed decision as to which type of partnership best suite your situation. Then HTW Law will then prepare the partnership agreements for you and your partners to make sure that all rights and obligations of each party involved is reduced to writing; and that the financial interests of all related parties are properly protected.
HTW Law can help. Call us now at 647-849-6582 or send us a message if you have some legal questions / inquiries or want to schedule an appointment with HTW Law.