Limited Partnership

A limited partnership consists of both general partners and limited partners, where the general partners undertake and are responsible for the operation of the partnership, while the limited partners merely undertake the investment of a specific amount of property to the limited partnership, and as such are "not liable for the obligations of the limited partnership except in respect of the amount of property the limited partner contributes or agrees to contribute to the capital of the limited partnership." [section 57, Partnership Act (Alberta) R.S.A. 2000, c. P-3, which is comparable to section 9 of the Limited Partnership Act (Ontario) R.S.O. 1990, c. L.16]

Limited partnerships are advantageous to individuals seeking to participate in the upside of a particular business project from an investment standpoint (non-active), while seeking to limit their legal exposure to the amount of their contribution. The critical point is that they refrain from an active role in the business of the partnership, otherwise they seriously risk losing the limited liability protection that they are seeking to benefit from..

For legal counsel as to your business partnership or joint venture, contact lawyer Christopher Neufeld with Neufeld Legal Professional Corporation at Chris@NeufeldLegal.com or 403-400-4092 (Calgary, Alberta) 416-887-9702 (Toronto, Ontario).

Neufeld Legal Professional Corporation is a Canadian law firm operating out of Calgary, Alberta and Toronto, Ontario, and is focused on corporate transactional matters that impact local, national and international businesses in their quests for corporate success.