Offshore Companies

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Canada, Ontario

LP – Limited Partnership

General Info

Procedures to incorporate

Ontario, second largest province of Canada in area, after Quebec, making up around 38% of Canadian GDP. Though manufacturing plays an important role in Ontario’s economy responsible for 12,6% of Ontario’s GDP, the service sector makes up the bulk, 77,9%, of the economy. Ontario’s net debt-to-GDP ratio will rise to 40,7% in the year 2019–2020.
It occupies the strip of the Canadian mainland lying between Hudson and James bays to the north and the St. Lawrence River – Great Lakes chain to the south. It is bordered to the east by the province of Quebec, to the south by the United States, and to the west by the province of Manitoba. The most populous Canadian province, Ontario is home to more than one-third of Canada’s total population.

Ontario’s capital city, Toronto, is Canada’s most populous municipality with nearly 3 million people. The city is also ranked as one of the most multicultural in the world with half of its population born outside Canada.

Differences between Limited Partnership and General Partnership

Is operated by a single general partner with unlimited liability, supported by other “limited partners”.
The single general partner has a higher share of the earnings in exchange for increased contributions and risk.
Limited partners contribute capital but cannot be involved in the company’s management.
The liability of the limited partners is capped by the amount of capital they contribute.
Both general and limited partners can be either resident in Canada or abroad, no residency requirement.

In some provinces, limited partnerships are available only to some professionals such as lawyers, consultants or doctors.
Limited partnerships are relatively simple to be registered. A limited partnership is ruled by a partnership agreement, essential to clarify management accountability, ownership and profit distribution.

Setting up a Limited partnership (LP)

in Ontario
A Limited Partnership is a form of general partnership, which is one of three ways of setting up a business entity in Canada. The other two entity types are the incorporation and the sole proprietorship. Each one has its own operational, accounting, tax and legal requirements.

While in Canada, the registration of an incorporation (or limited company as named in other jurisdictions) requires, depending on the Canadian Province it is being incorporated, the appointment and existence of a local resident director, such legal requirement is not imposed on the registration of a Limited Partnership, wherever the province it is being registered, while partners can be resident overseas.

Main advantages of an Ontario LP

An advantage for limited partners is that their personal liability for business debts is limited. A limited partner can only be held personally responsible up to the amount he or she invested. Limited partners enjoy a protected investment, knowing they cannot lose more money than they’ve contributed. Moreover, a Limited Partnership in Canada has no restrictions on residency, no minimum authorized capital, and no corporate income tax.

Main purpose of a Limited Partnership in Canada

Limited partnerships are generally used by hedge funds and investment partnerships as they offer the ability to raise capital without giving up control. Limited partners invest in an LP and have little to no control over the management of the entity, but their liability is limited to their personal investment.

Key Corporate Features

+ Operations

The LP is run by the single general partner with majority on ownership. A limited partnership has relatively few operational formalities, low administration costs and clear rules for raising capital. However, important decisions are made by the general partner, while limited partners are simply kept notified and informed.

+ Accounting

Income, expenses and cash flow management are all tracked internally with additional outside support for other accounting functions. Public reporting is not required. However, general financial information is needed to run the LP business and satisfy the needs of bankers, limited partners and others.

+ Taxation

Separate tax returns for the partnership are not required to be filed. Each partner is personally tax on his/her own profit, based on his/her ownership share on the LP. Taxable income is subject to the personal tax rates of the individual in case he/she is resident in Canada. Since an LP is not considered a separate legal entity subject to taxation, all profits realized by the LP flow through the LP to its partners, who subsequently pay tax as required by the legislation of their country of residence. As such, LPs are not required to file tax returns or pay any income tax in Canada.

+ Legal

The general partner is liable for the full assets and liabilities of the partnership. Limited exposure for the limited partners is an advantage. Only the personal assets of the general partner can be seized in case of any eventual legal claim.

Packages and Prices

Canada, Ontario

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The cheapest option company formation, payment government fees, registered office, local registered agent, Client Due Diligence (CDD) full and free tax and legal assistance, and much more, to keep your entity fully compliant.

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A special package with all services as included on the Standard Package, plus our Bank Account opening services with a local bank based in UAE, providing account opening remotely, and offering you online banking, multi-currency account, debit cards and all other major banking services you may need.

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A package with all services as included on the Business Package plus full Nominee Services (Nominee Members and Managers) providing you the highest degree in terms of confidentiality and anonymity.

How can we help you?

Should you have any question, our Business Development Managers team will be ready to guide and assist you!