Partnership Registration Guide · Ontario · Licensed CPA

How to Register a Partnership in Ontario

How to register a partnership in Ontario, whether a general partnership through the Ontario Business Registry or a limited partnership by declaration. The registration routes, how a partnership is taxed as a flow-through, liability, the partnership agreement, and the CRA setup. Written by a licensed Canadian CPA who works with partnerships.

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To register a general partnership in Ontario, you register the partnership's business name through the Ontario Business Registry, receiving a Master Business Licence and Business Identification Number, while a limited partnership is registered by filing a declaration. You also obtain a CRA business number and any GST/HST or payroll accounts. A partnership does not pay income tax itself, each partner reports their share on their own return. A written partnership agreement is strongly recommended. We handle the registration, CRA setup and reporting.

Types of Partnership in Ontario

The first decision is which kind of partnership fits. A general partnership is the most common, all partners share management and are personally liable for the partnership's debts, and it is registered by registering the partnership's business name. A limited partnership has one or more general partners who manage and bear liability, plus limited partners whose liability is capped at their investment provided they stay out of management, and it is registered by filing a declaration. A limited liability partnership is available to certain professions and limits partners' exposure to each other's negligence. Each type has different registration, liability and use cases, so identifying the right one is the first step.

Choosing the right type from the start avoids liability surprises and rework. This page supports our full company registration and incorporation services, and the tax preparation that handles each partner's share.

General vs Limited Partnership

The two main types differ in management, liability and how they are registered. Here they are side by side.

Factor	General Partnership	Limited Partnership
Management	All partners share management	General partners manage
Liability	All partners personally liable	Limited partners capped at investment
How to register	Register the business name	File a declaration
Best for	Active partners running a business together	Passive investors plus a managing partner
Tax treatment	Flow-through to partners	Flow-through to partners

Both types flow income through to the partners for tax; the core difference is liability and management. A general partnership suits partners actively running a business together, while a limited partnership suits arrangements with passive investors alongside a managing general partner. We confirm which fits your situation and register it correctly.

How to Register a Partnership, Step by Step

Registering a partnership follows a clear sequence, and doing each step properly protects the partners:

Choose the partnership type and name. Decide between a general and a limited partnership based on management and liability, and choose the partnership's business name.
Put a partnership agreement in place. Agree each partner's share of profits and losses, contributions, decision-making, and what happens if a partner leaves, so default rules do not decide it for you.
File the registration. For a general partnership, register the business name on the Ontario Business Registry; for a limited partnership, file the declaration identifying the general and limited partners.
Set up the CRA accounts and books. Obtain the partnership's business number, open GST/HST and payroll accounts where needed, and set up bookkeeping that tracks each partner's share.

The partnership agreement is the decision that matters most: It sets each partner's share of profits and losses, contributions, decision-making and exit terms. Without one, default partnership rules apply, often splitting everything equally, which may not match what the partners intended and leaves disputes with no agreed framework. Getting it right at the start is where the value is.

How a Partnership Is Taxed

The defining feature of a partnership is that it does not pay income tax itself, it is a flow-through. The partnership calculates its income, and each partner then reports their share on their own return and pays tax at their own rate: an individual partner on their personal return, a corporate partner on its corporate return. The split follows the partnership agreement. Because income is taxed to the partners as it is earned, there is no tax deferral the way a corporation offers on retained profit, but a partner's share of a partnership loss may be available against their other income, subject to at-risk and other limits, which can help in early years. Depending on its size and makeup, the partnership may also have to file a partnership information return that reports the income and each partner's share, even though the partnership pays no tax on it. Separately, the partnership registers for GST/HST in its own name once its taxable sales exceed $30,000 over four consecutive quarters. We prepare the partnership's figures, any information return, and each partner's reporting through our tax preparation service.

Partnership or Incorporation: Trade-offs

Deciding between a partnership and a corporation comes down to liability, tax and simplicity. A general partnership is simple and inexpensive, pools the partners' skills and capital, and flows income and losses straight to the partners, so early losses can offset other income, but the partners are personally liable and there is no tax deferral. A corporation gives limited liability, potential tax deferral on profit left in the company, and more planning flexibility, at more cost and formality. A limited partnership sits in between for liability, capping limited partners' exposure while keeping the flow-through. There is no universally right answer, the fit depends on how much liability protection the partners need, whether profit will be retained, and the cost the business can carry. We review the situation and recommend the structure that fits, and can handle the incorporation instead where that is the better move.

A Simple Worked Example

Consider a general partnership of two equal partners that earns $100,000 of profit in the year:

Step	Result
Partnership profit	$100,000, partnership pays no income tax
Each partner's 50% share	$50,000 reported on each partner's own return
Tax paid	By each partner at their own rate

The partnership itself pays no income tax on the $100,000. Each partner reports their $50,000 share on their own return and pays tax at their personal rate, so the total tax depends on each partner's own situation. If the partnership had instead made a loss, each partner's share of that loss may be available against their other income, within the rules. This flow-through is the defining feature of partnership taxation.

Where partners get it wrong: Starting a partnership with no written agreement, so default rules and disputes decide things, not realising general partners are personally liable for each other's business debts, choosing a general partnership when a limited partnership or corporation fits better, missing a required partnership information return, and not registering the partnership for GST/HST once past the threshold. Each is avoidable with proper set-up.

Case Study: Two-Partner Business Starting Right

Two partners starting a business together came to us before registering, unsure how to set it up. We confirmed a general partnership fit, registered the partnership's business name on the Ontario Business Registry, coordinated a partnership agreement setting each partner's share and exit terms, obtained the partnership's business number and GST/HST account, and set up bookkeeping that tracked each partner's share. When the first tax season came, each partner's share flowed cleanly onto their own return. The figures here are illustrative of the work we do, not a specific client file.

Partnership registered. Agreement in place. Shares reported cleanly.

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We confirm the type, register it, coordinate the agreement, and set up the CRA accounts and books. AFFORDABLE flat fees. All fees include HST; government fees separate.

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Frequently Asked Questions: Registering a Partnership in Ontario

How do I register a partnership in Ontario?

For a general partnership, you register the partnership's business name through the Ontario Business Registry, which gives you a Master Business Licence and Business Identification Number. A limited partnership requires a separate declaration filing. You also get a CRA business number and, if needed, GST/HST and payroll accounts. We handle the registration and CRA setup.

What is a partnership?

A partnership is a business carried on by two or more people or entities together, sharing profits, losses and responsibilities. It is not a separate legal entity like a corporation, the partners are the business, and they generally share liability. Partnerships are common for professionals and family businesses. We set up the registration and the tax reporting.

What types of partnership can I register in Ontario?

The main types are a general partnership, where all partners share management and liability, a limited partnership, which has general partners who manage and limited partners whose liability is capped at their investment, and a limited liability partnership, available to certain professions. Each has different registration and liability rules. We advise which fits and register it.

How do I register a general partnership?

You register the partnership's business name through the Ontario Business Registry, receiving a Master Business Licence and a Business Identification Number. All partners are recorded, and the registration is renewed every five years. Then you set up the CRA business number and any GST/HST or payroll accounts. We handle the full registration and CRA setup.

How do I register a limited partnership?

A limited partnership is registered by filing a declaration under Ontario's limited partnership rules, identifying the general and limited partners, rather than a simple business-name registration. It requires more formality because of the limited-liability feature for limited partners. We prepare and file the limited partnership declaration and set up the CRA side.

What is the difference between a general and a limited partnership?

In a general partnership, all partners share management and are personally liable for the partnership's debts. In a limited partnership, general partners manage and bear liability, while limited partners contribute capital and have liability limited to their investment, provided they stay out of management. The structures suit different goals. We help you choose and register the right one.

Is a partnership a separate legal entity?

Generally no. Unlike a corporation, a partnership is not a separate legal entity, the partners are the business, and they are generally personally liable for its obligations. This is a key difference from incorporating. It affects both liability and tax, so understanding it before you start matters. We explain the implications and set the structure up properly.

How is a partnership taxed in Canada?

A partnership does not itself pay income tax. Instead, the partnership calculates its income, and each partner reports their share on their own return, an individual reports it on their personal return, a corporate partner on its corporate return, and pays tax at their own rate. The partnership is a flow-through for tax. We prepare the partnership's figures and each partner's reporting.

Does a partnership file its own tax return?

A partnership does not pay tax, but it may be required to file a partnership information return depending on its size and makeup, which reports the partnership's income and each partner's share. The partners then report their shares on their own returns. Whether the information return is required depends on the rules. We determine this and handle the filings.

Do partners pay tax individually?

Yes. Each partner includes their share of the partnership's income on their own tax return and pays tax at their own rate, whether they are an individual or a corporation. The partnership itself is not taxed. This flow-through means the tax outcome depends on each partner's own situation. We calculate each partner's share and handle the reporting.

Do I need a partnership agreement?

It is strongly recommended. A partnership agreement sets out each partner's share of profits and losses, contributions, decision-making, how disputes are handled, and what happens if a partner leaves or the partnership ends. Without one, default rules apply that may not suit you. While it is a legal document, we work alongside it and reflect it in the tax and books.

What happens if I don't have a partnership agreement?

Without a written agreement, the default rules under partnership law apply, which generally split profits and decisions equally and may not match what you intended. Disputes then have no agreed framework to resolve them. This is a common and avoidable problem. We strongly recommend a proper agreement and set up the books to match its terms.

Do partners share liability?

In a general partnership, yes, partners are generally jointly liable for the partnership's debts and obligations, and can be personally responsible even for debts another partner incurred for the business. In a limited partnership, limited partners' liability is capped at their investment. This liability difference is a major factor in choosing the structure. We explain it before you register.

How are profits and losses split in a partnership?

Profits and losses are split according to the partnership agreement, in whatever proportions the partners agree. Without an agreement, the default is generally equal sharing. The agreed split determines how much income each partner reports and taxes. Getting this documented is important. We reflect the agreed split accurately in the reporting and books.

Do partnership losses help the partners?

They can. Because a partnership flows through, a partner's share of a partnership loss may be available against their other income, subject to the rules that limit losses to a partner's at-risk amount and other restrictions. This can be valuable in early years. The rules are specific, so we assess how a loss can be used in each partner's situation.

Does a partnership need to register for GST/HST?

A partnership registers for GST/HST like any business once its taxable sales exceed $30,000 over four consecutive quarters, and may register voluntarily before that. The registration is in the partnership's name. GST/HST applies to the partnership's taxable sales regardless of the flow-through income tax treatment. We set up and file the partnership's GST/HST.

Can a corporation be a partner in a partnership?

Yes. A partner can be an individual, a corporation, or in some cases another partnership or a trust. A corporate partner reports its share of the partnership income on its corporate return. Partnerships with corporate partners have specific rules to be aware of. We handle partnerships with individual and corporate partners and their respective reporting.

Should I register a partnership or incorporate?

It depends on your goals. A partnership is simpler and flows income directly to the partners, which suits some situations, while incorporating gives limited liability, potential tax deferral on retained profit, and more planning, at more cost and formality. Liability and tax drive the choice. We review your situation and recommend the structure that fits, then set it up.

What are the advantages of a partnership?

A partnership is relatively simple and inexpensive to set up, pools the skills and capital of the partners, and flows income and losses directly to them, so early losses can offset other income. It avoids the cost and formality of a corporation. For the right situation it is an efficient structure. We help you decide whether it fits and register it.

What are the disadvantages of a partnership?

The main drawbacks are personal liability in a general partnership, including for a partner's business actions, no separate legal entity, and no tax deferral, since income is taxed to the partners as earned. Disagreements without an agreement can be difficult. These are why some businesses incorporate instead. We explain the trade-offs before you commit.

How many partners can a partnership have?

A partnership needs at least two partners and can have many more, individuals or entities. The practical limit is what the partners can manage and agree on. Larger partnerships make a clear agreement even more important. We set up the registration and reporting for partnerships of any size.

Do I need a business number for a partnership?

Yes, if the partnership needs CRA accounts. The partnership obtains its own business number for GST/HST, payroll, and any partnership information return, separate from the partners' personal numbers. This keeps the partnership's tax accounts distinct. We obtain the business number and open the accounts the partnership needs.

How do I add or remove a partner?

Adding or removing a partner is governed by your partnership agreement and generally requires updating the registration and the CRA records, and can have tax consequences depending on how interests change hands. It is not just an informal change. We handle the registry and CRA updates and address any tax implications of the change.

What records does a partnership need to keep?

A partnership keeps records of its income and expenses, the partners and their shares, the partnership agreement, bank records, and GST/HST and payroll records where it is registered, generally for six years. Good records support each partner's reported share and the partnership's filings. We set up bookkeeping that keeps the partnership's records complete.

Does registering a partnership give me the business name?

Registering the partnership's business name in Ontario lets you operate under that name, but it offers limited name protection compared with an incorporated name, and does not stop others from using a similar name as strongly. A name search shows conflicts. If name protection matters, incorporation may suit better. We advise on this and register your name.

How long does it take to register a partnership?

A general partnership business-name registration through the Ontario Business Registry is often processed quickly, sometimes the same day, while a limited partnership declaration takes a little longer because of the added formality. Setting up the CRA accounts adds some time. We handle it promptly so you can start operating.

How much does it cost to register a partnership?

A general partnership pays a provincial fee to register its business name, while a limited partnership pays a fee to file its declaration, plus any name-search cost. We quote a flat professional fee to handle the registration, the agreement coordination, and the CRA setup correctly, and all our fees include HST; the government fees are separate.

Can Gondaliya CPA register my partnership?

Yes. We confirm whether a general or limited partnership fits, register the partnership name or file the limited partnership declaration, obtain the CRA business number and GST/HST and payroll accounts, set up bookkeeping, and prepare the partnership's figures and each partner's reporting. Fees are an AFFORDABLE flat amount including HST, quoted upfront with government fees separate, paid by Interac e-Transfer to info@gondaliyacpa.ca, auto-deposit enabled, security question Not Applicable.

How much does it cost with your firm?

From $400, depending on whether it is a general or limited partnership and the number of partners. We quote an exact flat professional fee before starting, all our fees include HST, and the government fees are separate. There is no hourly billing, so the number you are quoted is the number you pay.

How do I get started?

Please book a free consultation and tell us who the partners are and what the business will do. We confirm the right partnership type, register it, set up the CRA accounts, and put the bookkeeping and reporting in place. Book Free Consultation →

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Register Your Ontario Partnership the Right Way.

We confirm the right partnership type, register the name or file the declaration, coordinate the partnership agreement, open your CRA accounts, and set up bookkeeping and each partner's reporting. AFFORDABLE flat fees. All fees include HST; government fees are separate.

Book Free Consultation Know Exact Fees within 2 Minutes