PARTNERSHIPS
A relationship between two
or more individuals, corporations, trusts, or partnerships that join together
to carry on a trade or business is a partnership.
Published by Zoom Startups
on November 10th, 2021.
The resources each partner contributes to a business partnership can be in the form of money, labour, property, or skills. The business profits or losses are generally distributed among the partners established on the partnership agreement. All partners share the same risks in a business operation, but may not similarly share the business's profits, losses, or liability. The amount of liability each partner has hinges greatly on which kind of partnership is created.
Our professional consultant at Zoom Startups can assist
with the steps you should take before actually starting your
partnership such as:
Ø
selecting a business structure
Ø
creating a business name
Ø
determining the availability of
your business name
Ø
registering your business name
Ø
registering for licences, taxes and
relevant permits
Ø
complete a partnership agreement
with the assistance of a legal professional
Ø
open a bank account with authorized
signatories
have a target date to start your business
There are basically three types of business
partnerships in Canada:
X
General Partnership is the most
common. In a general partnership, each partner is fully personally liable for
the debts, contractual obligations, and torts resulting from the partnership's
operation. If you are a partner in a general partnership, you could be
personally sued for something that happens in the business. Our certified expert can advise on
your agreement.
X
Limited Partnerships are often set
up with a corporation as the general partner and two or more individuals as
limited partners. A partnership
agreement is crucial to clarify management
accountability, ownership and profit distribution. A limited partner also known
as a "silent partner" gives financially and may sometimes offer
advice, but is not otherwise involved in the business.
Most
limited partnerships may:
Ø
be operated by a single general partner
with unlimited liability but will be supported by other “limited partners”
Ø
have a single general partner who
gets a bigger share of the earnings in exchange for increased contributions and
risk
Ø
have limited partners who contribute
capital but cannot be involved in the company’s day to day management
have a cap on the amount of capital they contribute which limits their liability
X Limited
Liability Partnership (LLP) offers the partners more liability protection than
they would have as general partners. For example if someone wanted to sue the
partnership, only the assets of the partner who worked with that client would
be at risk. The assets of the other partners would be protected. LLPs are
available in all provinces in Canada and are governed by provincial
legislation. The protection provided differs from province to province.
In most provinces, LLPs are only allowed
in high-risk professional environments such as lawyers, accountants,
architects, or doctors, where the daily business activities of each partner
have minimal overlap. We are qualified
consultants who can assist with you getting your business off to a good
start. We can help with your agreement or contract and ensure that you
are your interests are protected. Contact us
at Zoom Startups so you can begin your successful business!
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