At Jahanshahi Law Firm, we assess your short and long-term business plans to advise which partnership is the right business vehicle for you. We guide you through the partnership process and draft a partnership agreement as necessary. While a partnership agreement is not mandatory for the formation of certain partnerships, we always recommended that a partnership agreement be drafted by an experienced business lawyer to ensure the agreement is enforceable, comprehensive, and correctly sets out the intentions of the partners. As always, you should consider seeking accounting and tax advice from an experienced accountant prior to deciding on an entity for your business. In Ontario, there are three types of partnerships: general partnerships, limited partnerships, and limited liability partnerships.


In a general partnership, the partners have unlimited liability for damages, financial losses, and liabilities of the partnership. If a general partnership is the ideal business vehicle for you, our business law team will assist the prospective partners in choosing a business name, registering, and filing the necessary documentation with the Ministry of Public and Business Service Delivery, and drafting a partnership agreement as necessary. Most importantly, we will ensure that the formation of your general partnership fully complies with applicable business law legislation. While general partnerships can be formed without a partnership agreement, we always recommend that the partners enter into a detailed partnership agreement that sets out the terms and conditions of the partnership in addition to the rights and obligations of the partners.


A limited partnership may consist of one or more general partners that manage the limited partnership and one or more limited partners that are not involved in the management of the partnership. In return for not engaging in management activities, the limited partners have limited liability. A limited partner’s liability is limited to the amount of their investment. The general partner on the other hand has unlimited liability regarding the liabilities of the limited partnership. Limited partnerships may be useful in scenarios involving family businesses or commercial real estate projects. For example, a limited partner will front an investment in return for the general partner overseeing and managing the construction of a shopping mall. Similarly, in family businesses, an individual may be named the general partner to move the business forward while other family members invest in the business venture without having management authority. If a limited partnership is the ideal business vehicle for you, our business law team can assist with structuring and formation of the limited partnership as well as drafting a legally enforceable and detailed limited partnership agreement that clearly defines the terms of the partnership.


Limited liability partnerships are reserved for certain professions like dentists, lawyers, accountants, and engineers. In Ontario, a limited liability partnership may only carry-on business for the purpose of practicing a profession expressly governed by an act. A limited liability partnership allows members of the same profession to combine their resources for the purpose of moving the business forward while remaining only liable for their own conduct within the limited liability partnership. In order to form a limited liability partnership, the partners must both comply with the Partnership Act and the rules and regulations set by the regulatory body that governs the profession. For example, in the case of lawyers wishing to form a limited liability partnership, all lawyers are required to maintain professional liability insurance in accordance with the by-laws set out by the Law Society of Ontario.

If you are a member of a profession that is authorized by an act to form a limited liability partnership, we will carefully examine your business situation and guide you throughout the limited liability partnership formation process. Our business law team will draft the limited liability partnership agreement and ensure that the proposed business name is in compliance with legislation, we will assist in obtaining authorization to practice as a limited liability partnership from your profession’s governing body, and we will file the necessary documentation with the Ministry of Public and Business Service Delivery as necessary.

If you are thinking about forming a partnership, contact us today to set up a consultation where you are able to discuss your questions or concerns regarding the formation of a partnership with a business lawyer.

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What Act Governs Partnerships in Ontario?

In Ontario, general partnerships and limited liability partnerships are governed by the Partnerships Act, while limited partnerships are governed by the Limited Partnerships Act.

What if I do not Have a Written Partnership Agreement in a General Partnership?

If you do not have a partnership agreement in place, the terms of the Partnerships Act will operate if no partnership agreement exists or if the partnership agreement does not address a specific matter.

What is a Partnership Agreement?

A partnership agreement is a legal contract that sets out the rights and obligations of each of the partners.

To find out more information about partnerships, visit the Business Law Insights section of our website.

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