Partnership

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

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

When you form, change, or dissolve a partnership, consider:

• whether the relationship is a partnership;
• the special rules about capital gains or losses and the recapture of capital cost allowance that apply when you give 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 limited partners 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

• Business and Professional Income guide (T4002)
• IT90, What is a Partnership?