Partnership

A partnership is usually the relationship between persons who carry on a business in common with the belief they will make a profit. You can have a partnership without a written agreement.

To help you decide if you are a partner in a certain business, determine the type and extent of your involvement in the business and check the laws of your province or territory.

Partnership Information Return (PIR) - T5013

Your partnership has to file a partnership information return (PIR) if the partnership has six or more partners at any time in the fiscal period; or the partnership has five partners or less throughout the whole fiscal period and one or more of its partners is another partnership. For other situations where you have to file a PIR, see T4068, The Guide for the T5013 Partnership Information Return.

Partnerships do not have to file a partnership information return (PIR) if they have five partners or less throughout the whole fiscal period; and no partner who is another partnership. Calculate the partnership's income and expenses using the same rules you would use for reporting your business and income expenses for a proprietorship.

When you form, change, or dissolve a relationship that may be a partnership, consider:

• whether the relationship is a partnership;
• the special rules about capital gains or losses and the recapture of capital cost allowance (CCA) that apply when you transfer properties to a partnership;
• the special rules that apply when you dissolve a partnership; and
• the special rules that apply when you sell or dispose of your interest in a partnership.

Limited partnership
A limited partnership is a partnership that gives its partners limited responsibilities that are similar to those given to shareholders of a corporation. A limited partner's liability as a partner of the partnership is limited, as opposed to that of a general partner who has unlimited liability.

Forms and publications

• Guide T4002, Business and Professional Income
• T4068, The Guide for the T5013 Partnership Information Return
• Slip T5013, Statement of Partnership Income
• Slip T5013A, Statement of Partnership Income for Tax Shelters and Renounced Resource Expenses
• Form T5013SUM, Information Return of Partnership Income
• Interpretation Bulletin IT-90, What is a Partnership?