in Ontario: $49*
Two or more persons, corporations, trusts, or partnerships located in Ontario may create a general partnership.
Partners are not required to sign any agreement to create a partnership. A simple verbal agreement is sufficient to form it. But in order to protect partners in the event of a disagreement or dissolution of a partnership, a partnership agreement should be prepared.
Each partnership located in Ontario must register its business name with the province.
Registration of new business names takes 30 minutes to 2 business hours.
Renewal of existing business names takes 1 to 2 weeks.
Ontario Business name registration is valid for 5 years.
In a general partnership each partner takes responsibility and becomes personally liable for all the debts and obligations of the business. Thus, each partner has unlimited personal liability including liability for the actions of the other partners.
If you are interested to get a limited liability company protecting you from the personal liability for your business, you should consider incorporation of your business.
Easy and inexpensive to set up
Flexible with little government regulation
New partners can be added easily
Risks are shared equally among partners
Minimal working capital required
Partners are taxed on business earnings in proportion to their share
Business is taxed through partners’ personal income tax, and losses can be used to reduce taxes on other sources of personal income
Wages payable to spouses are deductible from the income of the business
Unlimited personal liability for the business
Personal liability for the actions of the other partners (this includes actions that may be taken without partners’ knowledge)
Lack of continuity in business organization
Difficulty in raising additional capital
Partners are taxed at individual tax rate, which is much higher than corporate tax rate
If you need to discuss your personal situation with a lawyer, chartered accountant or tax advisor, our company is able to refer you to a professional who is authorized to practice in Ontario.