Canada LLP
How to open an LLP in Canada

Setting up a Limited Liability Partnership (LLP) in Canada involves a series of legal and administrative steps, which vary slightly by province since LLPs are regulated at the provincial level. The process is generally similar across Canada, but it’s important to follow the specific regulations of the province where the LLP is being formed. Here’s a step-by-step guide to setting up an LLP in Canada:

Step 1: Determine Eligibility for LLP Structure

In most Canadian provinces, LLPs are typically restricted to professional services, such as:

Law firms
Accounting firms
Architects
Engineers
Other regulated professions

Check the regulations in your province to ensure that your business type qualifies for LLP status. In some provinces, only professionals licensed by the appropriate governing body (e.g., law societies or accounting boards) can form an LLP.

Step 2: Choose the Province

LLPs must be registered in a specific province or territory in Canada. Each province has its own rules for LLP registration.

• Ontario and British Columbia are common provinces for LLP registration, particularly for professional firms.
• Nova Scotia and Alberta allow LLP registration for a wider range of business types.

Step 3: Choose a Name for the LLP

The LLP must have a unique name that complies with provincial rules. The name must:

• Clearly identify the business and distinguish it from other businesses.
• Include the words “Limited Liability Partnership” or the abbreviation “LLP”.
• Be approved through a name search to ensure it’s not already in use by another business.
• Name Search: You will typically need to conduct a NUANS (Newly Upgraded Automated Name Search) report in most provinces to verify that your chosen name is available. This report compares your proposed name to existing names in databases across Canada.
• Some provinces, such as British Columbia, use a different name search system.

Step 4: Register the LLP with the Provincial Authority

Once you’ve chosen an approved name and confirmed your eligibility for LLP status, the next step is to register the LLP with the appropriate provincial authority. Here’s how this generally works:

Ontario
Register with the Ontario Ministry of Government and Consumer Services using the required forms (such as the Form 3 for LLP registration).
A Declaration of Partnership must be filed, specifying details about the LLP and its partners.
Pay the applicable registration fee.

British Columbia
Register with BC Registry Services and file a Statement of Registration for the LLP.
Similar to Ontario, you’ll need to provide information about the partnership and partners, and pay the applicable fees.

Alberta
Register with Alberta Corporate Registry and file the appropriate forms (e.g., LLP registration form).
A Statement of Registration is required, including details about the partners and the business.

Nova Scotia
Register with the Nova Scotia Registry of Joint Stock Companies.
Similar documentation is required, including a Declaration of Partnership or Statement of Registration.
Each province will require you to pay a registration fee, which varies depending on the province.

Step 5: Draft a Partnership Agreement

Although a partnership agreement is not always legally required, it is highly recommended to have one in place. The partnership agreement outlines the rights, responsibilities, profit-sharing ratios, and decision-making processes for the partners. It typically includes:

• Capital contributions of each partner.
• Profit and loss sharing arrangement.
• Management structure and decision-making authority.
• Dispute resolution mechanisms.
• Exit or dissolution procedures if a partner leaves the LLP.

The partnership agreement provides clarity and can help avoid disputes later on.

Step 6: Appoint a Registered Office (If Required)

• Some provinces, such as Ontario, require that LLPs maintain a registered office in the province. This office serves as the official address for legal correspondence and government notices.
• The registered office can be the LLP’s place of business or a third-party service, such as a lawyer’s or accountant’s office.

Step 7: Obtain Licenses and Permits (If Required)

• If your LLP operates in a regulated profession, partners may need to be licensed by the relevant provincial regulatory body. For example:
• Lawyers must be licensed by their provincial law society.
• Accountants may need to be registered with a provincial accounting board.
• Architects and engineers must meet specific provincial licensing requirements.

Ensure that all partners comply with these licensing regulations, as failure to do so could affect the LLP’s legal standing.

Step 8: Register for GST/HST (If Applicable)

• If your LLP will have annual revenues over $30,000, you must register for a GST/HST (Goods and Services Tax/Harmonized Sales Tax) account with the Canada Revenue Agency (CRA). Even if your revenues are below this threshold, you may choose to register voluntarily.
• Once registered, the LLP will need to charge and remit GST/HST on goods and services sold, and file regular tax returns with the CRA.

Step 9: Open a Bank Account

• Open a business bank account in the LLP’s name. Most banks will require the LLP’s registration documents and a copy of the partnership agreement.
• It is crucial to keep the LLP’s finances separate from the partners’ personal finances for tax and liability purposes.

Step 10: File Ongoing Reports and Renew Registration

• LLPs are generally required to file annual reports with the provincial government to keep their registration in good standing.
• You may need to renew the LLP registration annually (this varies by province), and any changes to the partnership (e.g., new partners or changes in address) must be reported. 

Step 11: Comply with Tax Filing Requirements

• The LLP itself is not taxed as a separate entity. Instead, each partner is taxed individually based on their share of the LLP’s income. However, the LLP must file an annual partnership information return (T5013) with the CRA to report income and allocations to partners.
• Partners (whether individuals or corporate entities) will need to report their share of the LLP’s income on their personal or corporate tax returns.

Summary of Steps to Set Up an LLP in Canada

1.  Ensure eligibility (most provinces restrict LLPs to professional services).
2.  Choose a province for registration.
3.  Choose and register a business name (conduct a name search).
4.  Register the LLP with the provincial authority.
5.  Draft a partnership agreement.
6.  Appoint a registered office if required.
7.  Obtain licenses or permits for regulated professions.
8.  Register for GST/HST if applicable.
9.  Open a business bank account.
10. File annual reports and renew the LLP as needed.
11. Comply with tax filing requirements for the partnership and the partners.