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Partnerships explained
Most Partnerships tend to be small and localized. The advantages commonly associated with carrying on a Partnership are the following:
- ease in which to start and dissolve the business; and
- modest start up expenses.
There are, however, significant disadvantage which may lead you to decide against choosing this business structure:
Unlimited liability
The owner is personally responsible for all of the debts and obligations incurred by the business. The owner is thus liable to the full extent of his/her personal assets for all of the liabilities and losses which are incurred by the business.
Taxes
As a Partnership you need to report all income of your business on your personal tax returns. If you have losses in the first year you can’t generally carry forward those losses to offset future profits
Corporation vs. DBA: what’s the difference?
Several important differences between a corporation and a DBA
Corporation
How its unique
- Distinct legal personality from its owners (called shareholders) so exists beyond the lifetime of any founder
- Limited liability protection for personal assets
- Best to raise capital from investors
- More flexibility regarding taxation
Drawbacks
- Higher starting and operating costs
- More compliance requirements i.e. more government filings and paperwork
DBAs - Doing Business As (Partnership)
How its unique
- A sole proprietorship is owned by one individual and does not exist apart from the owner.
- Easiest and least expensive business to form.
- Little paperwork – business income included in personal tax returns
Drawbacks
- NO limited liability protection from personal assets
- Limited growth and investment potential
To find out more about which business structure is best for your click here.
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Partnerships Defined
A general partnership is a legal structure where two or more persons carrying on a business with a view to making a profit. Some individuals choose a partnership as the manner in which to carry on a business because of its ease of formation and dissolution, as well as its overall lack of formalities. You always register your partnership with the provincial government department or agency that handles business registrations in your province. It’s similar to a sole proprietorship but has 2 or more owners.
Different Types of Partnerships
There are other types of partnerships such as Limited Partnerships which may under certain circumstances shield the partners from personal liability of the partnership debts and obligations. Contact a competent lawyer for advice on which best suits your circumstances. CorporationCentre.ca does not offer legal advice of any kind.
DBA/Partnership Filing Fees and Timelines
* Please be advised that the NEQ (Numero d’entreprise du Québec) is obtained at the time of filing, however, there is a government processing time of approximately 14 business days before the trade name is officially approved.
** Please be advised that the current government delay to obtain a name decision for Saskatchewan is approximately 15 business days. This delay is in addition to the processing times for incorporations and business name registrations.
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