Sometimes two or more companies will decide to form a partnership.

The following information is required to register a partnership:

1) The name of the partnership 2) The province or territory where the partnership is to be situate 3) The business address of the partnership 4) The mailing address of the partnership (which can be the same) 5) The name and home address of each partner 6) The purpose or nature of business of the partnership 7) If any partner is a company then the company’s corporate number.

Partnerships are easy to form and low on start up costs. Each partner will bring his or her own skill set to the partnership. One partner will have skills in some areas and another in other areas which can result in broader management knowledge and the ability to diversify tasks and responsibilities. More than one viewpoint can result in more effective decision making.

When a partnership is formed the partners pool their personal assets and therefore the business partnership may need less funding than a sole proprietorship. It is also easier to borrow from lending resources when more than one person is obligated to repay the loan.

There is little government regulation for partnerships. The formation is simple with a partnership registration and there are no yearly filings which keeps the cost of forming and maintaining a partnership low.

In a general partnership each partner is liable for all of the partnership’s debts and obligations, even those incurred by one partner without the knowledge or authorization of other partners. If one partner is sued then the other partners in the partnership are equally responsible for any financial judgment imposed by a court. Unlike a corporation, which is considered an entity on its own, partners are liable personally for any debts to the partnership. Partners are responsible for each of the other partner’s actions. Each partner is deemed to know any information that has been given to another partner. Therefore partners must be able to trust each other to reveal all pertinent information.

If there is no partnership agreement in place, a partnership is dissolved upon the death or withdrawal of any partner or the acceptance of a new partner. A partnership agreement may be entered into with clauses therein which provide that the surviving partners may purchase the interests of the deceased or withdrawing partner. See below for more information about partnership agreements.

Profits must be shared by all partners equally unless a partnership agreement is in place to provide different percentages for different partners who invest more or less into the partnership.

If a partner, without the consent of the other partners, carries on a business of the same nature and he or she is competing with that of the partnership, the partner must account for and pay over to the firm all profits made by the partner in that business.

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