|
General
Partnership in Ontario
Partnership
is a simple and not expensive business structure. By carrying
business for profit you and your partners create a partnership. You don't
have to sign any agreement to create a partnership. A simple verbal
agreement is enough 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 drawn up.
A
partnership located in Ontario must register its business name with the
province.
Ontario
Business name registration is valid for 5 years.
Partnership
Registration
fee - $29
Government
fee - $60
GST -
$1.74
-----------------------
Total:
$90.74
|
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, click
here to order an Ontario
corporation or federal
corporation.
Benefits
of General
Partnerships
Easy
and inexpensive to set up
Flexible
with little regulation
New
partners can be added easily
Risks
are generally shared equally among partners
Minimal
working capital required
Broader
management base
Partners
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.
Disadvantages
of General
Partnerships
Unlimited
personal liability
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.
|
