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Advantages to Set up a Business in Canada Limited Partnership

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Advantages to Set up a Business in Canada Limited Partnership

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Canada LP Advantages to Register Ontario LP

Limited Partnerships is a simple form of business registration in Canada, which creates a Canadian company and does not generate filing and tax obligations in Canada for partners, who are not residents of Canada.

This form of business registration is extremely popular among software developers, web programmers; computer support specialists and IT service providers, who offer services to customers in Canada, US and Europe.

Some of the advantages to register your LP in Canada, Ontario:

Highly prestigious Canadian company

No restrictions on the residency of partners

Availability of one-man limited partnership, when one person is a sole general and limited partner

There is no minimum authorized capital. Partners can make any contribution to the limited partnership

No withholding tax on profit received by partners outside of Canada

No requirements to file corporate tax returns

No corporate income tax

Common use of Limited Partnership

Regular trading company for doing business in Canada, US, EU and other highly regulated jurisdictions

Agent working under Sales Agency Agreement. Principal may be any legal entity including companies registered in low and zero tax jurisdictions

Software development and IT support services, when major customers are located in Canada, US and EU

Online based businesses (website development, marketing services, auctions, webstores, etc.)

Corporate Tax of Limited Partnership

Limited Partnership is not considered as a taxable entity. Therefore, LP is not required to file corporate tax returns and pay income taxes.

All profit received by Limited Partnership passes through the company to its partners. Partners, who are not Canadian residents, do not have tax liabilities in Canada. If a partner is a Canadian resident, he is required to include his part of profit received through his Limited Partnership into his personal tax return and pay personal income tax.

There is no withholding tax on the profit passed to partners, who are non-Canadian residents.

There are no audit requirements for Limited Partnerships.

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