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.

On January 1, 2011, new filing criteria for the Partnership Information Return come into effect. The new filing criteria apply to partnerships (and nominee/agent for partnerships) with fiscal periods ending on or after January 1, 2011. For partnerships with fiscal periods ending on or before December 31, 2010, the current criteria still apply.
See Partnerships and Information return filing requirements for more information.

What's new

Partnerships - Elimination of corporation tax deferral

The deferral of tax by a corporation that has a significant interest in a partnership having a fiscal period different from the corporation's tax year will be eliminated.

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, 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?