Registration of partnership (LP)

The future of offshore business lies in and depends on application of more complex and thoughtful structures, using not only classic offshore, but also midshore, as well as completely onshore entities, so that the situation of incriminating in relations with offshores and legal optimization of taxes does not cross even the most meticulous tax inspector’s mind. For entrepreneurs interested in doing business in Canada, as well as operating through the use of a Canadian company in Europe and beyond its borders, we want to offer the establishment of a Limited Partnership in Canada for non-resident companies.

Your Canadian Limited Partnership (LP) will be registered in Canada, and will be a highly flexible legal form for running your business. Canadian LP is the simplest form for registering a company in Canada, which also does not create obligations to file accounts and pay corporate taxes for its partners who are not residents of Canada.

This form of companies is very popular among entrepreneurs related to IT business. There can be companies engaged in website development, businesses related to marketing services, auctions, web stores, as well as computer software developers, computer support specialists, IT service providers, etc. These companies, as a rule, serve customers from Canada, USA, the CIS countries, Asia and Europe.

Main advantages of the Canadian Limited Partnership are the following:

• Ownership of prestigious Canadian LP;
• There are no restrictions on the residence of the company's partners;
• Availability of Limited Partnership with one partner, when the company is managed by a single general and limited partner;
• There is no minimum capital requirement. Partners can make a contribution to the Limited Partnership in any amount;
• There is no tax on partners’ income received outside of Canada;
• There is no requirement to file a corporate tax declaration;
• There is no corporate income tax.

Corporate Tax for the Canadian Limited Partnership

Limited Partnership is not a taxable legal form of the company, so there is no need to complete or file accounts and pay income tax.
All profits received by the company come to partners who are not residents of Canada, and are not subject to taxation in Canada. Accordingly, the partners of Limited Partnership, who are residents of Canada, are required to pay local taxes.

There is also no requirement to file audit reports on the partnership.

Name of the Canadian Limited Partnership:

• Each limited partnership must have its name, which will contain such legal elements as "Limited Partnership" or "LP".
• LP can not have in its title a surname or a distinctive company name, if it is the surname or company name of one of the general partners.
• The name can be in English or French.
• The name of the partnership can not contain prohibited words such as "bank", "trust", "insurance", "stock exchange", "university", "academy", etc.

The term of registration of Limited Partnership will be about 2 months after the submission of all documentation.

Partners of the Canadian Limited Partnership

It should be clearly noted that there are no restrictions on partnership and on conducting its activities. Consequently, the Limited Partner has limited liability, and the General Partner has unlimited liability. Therefore, only a company should act as the general partner for more safer business.

General partner of the Canadian Limited Partnership

In order to establish a Limited Partnership, at least one general partner is required, who can be a resident of any country. Also, corporate general partners are allowed by law.

Limited partner of the Canadian Limited Partnership

To create a Limited Partnership, at least one limited partner is required, which can be any individual or legal entity that is a resident of any country.

Consequently, any non-resident company can act as a limited or general partner. As an example, it is possible to establish a company in Belize or another non-resident jurisdiction that will be your partner in the Canadian Limited Partnership.

Authorized Capital of the Canadian Limited Partnership

There is no requirement for the amount of the authorized capital for the Canadian Limited Partnership.

Partners may contribute money or other property in the Limited Partnership in any amount, but not with services.

The profit of a partner from the activities of the Limited Partnership is treated as personal property.

Responsibility of partners

General partners bear unlimited personal responsibility for the debts and obligations of the Limited Partnership, and liability of limited partners is limited by the amount of their contribution to the Limited Partnership.

Management

Limited Partnership is managed by general partners, if the Partnership Agreement does not allow general partners to appoint a manager.