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Best applications for Canadian LP companies

There are several forms of companies available which are widely used in Canada. The most common are: Corporations (Corp.), Extra-provincial corporations (EPC), Joint-Stock Companies (JSC), Limited Liability Partnerships (LLP) and Limited Partnerships (LP).

In general Limited Partnership (LP) is a form of a legal entity which includes participation and a cooperation of two partners, sharing liabilities and incomes in pursuit of a common goal. One of partners has limited liability and the other has unlimited liability. Usually the number of partners can be greater than two. Still, each is either a general partner (unlimited liability) or a limited partner (limited liability). LP in Canada can also be formed by one person being both general and limited partner.

General partners bear the liability for the company’s obligations, while having the right to participate in the management of the company (including voting, making decisions, representing the company and determine its development). Limited partners do not participate in the management of the company, they have the right to invest in it without having the right of controlling company’s daily performance.

Benefits of Canadian LP

There are several features which describe doing business in Canada. First of all, any form of a company established on its territory is considered a highly prestigious vehicle. Its jurisdiction is not included on the blacklist of any country, while also having no restrictions on cooperation with residents of any states. The second factor is that Canadian legislation offers an opportunity of registering and using its enterprises with a zero rate of tax (LP companies). This is stated in Canadian tax law, according to which LP is not considered as the separate subject of taxation due to taxes being paid by company’s partners in their place of residence.

Possible Canadian LP applications

Each abovementioned form of a company which are now rather popular in Canada is best for a specific purpose or situation, relating liabilities, taxes, and businessmen abilities to control the profits and losses of their business. When it comes to LP, in general it can be stated as a multiple-owner business or a business that is owned by several individuals, meaning that cooperation is its main feature. Also LP can be appealing to a business partnership where individuals are focusing on a single, limited-term project. Such projects can be found in reals estate, estate planning or film industry to name a few. Taking into account various LP companies’ functional features and establishing requirements the best applications for Canadian LP companies could involve real estate business.

Real estate industry is one of the industries which has contributed to the growth of the Canadian for decades. There are some numbers, showing that real estate business in America is flourishing. For example, in Quebec, since 1960, as a general rule, the value of properties continues to double every 10, 12 years, meaning that in the long term the businessmen or investors have so far always been winners.

Best examples of such businesses are: property development companies, property management companies, landscaping business, lawn care business, brokerage firms, real estate advisory and consultancy services, office hall rental services and even real estate investment clubs.

In general there are plenty of opportunities to buy land in Canada in order to establish business based on making a real-estate investment. The land can be also used for carrying out such projects as shopping malls, restaurants, offices and even subways or transportation routes. Additionally, a great choice may be incorporating a licensed Canadian construction company after analyzing the feasibility of the pre-purchase project and carrying on comprehensive business plans working together with architects and engineers with whom it will be possible to establish a LP company.