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British Columbia Limited Liability Partnership

A partnership is the relation between persons carrying on a business in common with a view of profit.  A partnership may exist simply because of the acts of the parties, except for limited partnership and limited liability partnership, which must be registered in order to be established.

A limited liability partnership (“LLP”) in British Columbia (“BC”) (the “BC LLP”) must be formed pursuant to the Partnership Act, RSBC 1996, Chapter 348 (the “Act”) with a partnership agreement setting out the terms and conditions of the relationships of the partners of a BC LLP.


A BC LLP may be formed as business partnership or a specific professional partnership, provided the act regulating the profession authorizes such a form of carrying on the professional business and conditions set by such act are satisfied.  A BC LLP does not exist until the registration statement is filed.  Any action taken by partners will be seen as actions of the partners of the general partnership with no limited liability afforded to them.  Thus, no actions should be taken before the registration statement is filed under the Act and acknowledgement of its receipt is received from the BC registrar.

The first step in creating the BC LLP is to ensure its proposed name is approved by the registrar by filing the name approval request with the registrar.  The filing fee for that request is $30. Upon approval of the requested name the registrar will provide the approval number.  Name of the BC LLP must have the words “Limited Liability Partnership” as part of and at the end of its name.

The next step is filing the registration statement.  The registration statement must set out:

  • Name and address of the individual filing the statement;
  • Business name of the BC LLP (name approval number must be included);
  • Mailing address of the BC LLP that is to be the registered office of the LLP after it is registered as such;
  • If a professional partnership, indicate that fact and confirm that such a BC LLP is authorized by the acts administering the profession;
  • A person filing the registration statement has approval of all other partners and a BC LLP’s agreement authorizes such filing by that person.

Filing fees for the registration statement of $275 must be paid at the time of the filing.  Once the registration statement is filed, an acknowledgement will be sent to the registered office of a LLP.


An LLP must have registered office in BC.  A BC LLP must keep at its registered office an alphabetical list of partners, their names and addresses, this list must be made available to any person requesting access to it.

An LLP must file annual reports with the registrar, filing fee is $35.  It also must file with the registrar an amendment if any changes occur from the information set out on the registration statement, filing fee is $30.

A BC LLP must file annual income tax statement under the Income Tax Act, RSC 1985, C.1.


A BC LLP will be liable for any loss arising as a result of wrongful act or omission of any of its partners during the normal course of business.  An LLP will also be liable for making good any loss arising from misapplication of funds received from a 3rd person in a course of business.  In case of the LLP each partner is not severally and jointly liable.

Generally and subject to a partnership agreement, a person who is a partner in a limited liability partnership is not personally liable for a partnership obligation to another person, to the partnership or another partner merely because that person is a partner.

A limited partner is not relieved from personal liability for that partner’s own negligent or wrongful act or omission or for the same of another partner of an LLP if the limited partner knew about the act or omission and did not take steps as a reasonable person would to prevent them.

The partner’s interest in the partnership property is not protected from claims against the partnership in respect of the partnership’s obligation.  Personal liability of partners in a BC LLP is limited to their interest in a partnership similar to liability of corporate directors.


Partners in the BC LLP can be individuals or corporations.  There are no specific requirements in regard to residency for the partners in the BC LLP.   If the corporate partner is incorporated under the British Columbia Business Corporations Act it will not have residency requirements for the directors as well.

Generally, partnership is not considered resident by the Canada Revenue Agency (the “CRA”); the individual partners may or may not be residents of Canada.


Income of the BC LLP will be calculated on the partnership level and then profits and/or losses distributed to each partner according the partner’s interest in the LLP and pursuant to the LLP’s agreement.  Eventually each partner’s share will be taxed at partner’s level at Federal and provincial tax rates for individuals.


  • Partner’s share of the losses from the business of the partnership may be offset against this partner’s other income.  However, special consideration shall be given to expenses while calculating rental income/loss.  Generally, any reasonable expenses incurred to earn rental income are deductible, provided the expectation of income is reasonable.  There are current and capital expenditures.  The cost of current expenses may be deducted in full in the year they were incurred.   The capital expenses cannot be fully deducted in a year they were incurred; instead, they are deducted over a period of several years as capital cost allowance (“CCA”).  The CCA can only be deducted against the income to the maximum extent of bringing the income to nil, but it cannot create a loss;
  • Liability is limited to the extent of the limited partner’s interest in the LLP;
  • No deemed disposition of the assets of the partnership on death of a partner, partner’s interest will be deemed disposed resulting in tax consequences to the deceased;


  • A BC LLP must be registered in order to be an LLP. A partnership agreement is required, which entails costs;
  • No confidentiality: a BC LLP must maintain alphabetical list of the names and addresses of all limited partners’ at the registered office, which list must be available to any person requesting access;
  • Annual reports with the registrar and filings if there are any changes: for example, change of address, change of partners;
  • December 31 year end, at which point income will be calculated and partners will have to include their part into their tax returns;
  • Rights of the partners will be determined by the partnership agreement not statute, thus, less protection to the minority;
  • The right of limited partners to transfer their ownership may be restricted and the buyer may not want to acquire a part of the interest as oppose to the whole property.

Limited Partnership versus Limited Liability Partnership

Limited Partnership

The statutory regime for limited partnerships is reasonably straightforward:  the general partner actively manages the business and is responsible for all of the debts of the partnership, and each limited partner is not participating in the day to day activities and only liable for the debts of the partnership to the extent of the capital it has contributed or agreed to contribute to the partnership.

Limited Liability Partnership

At its simplest, a BC LLP can be described as a general partnership in which the partners are not liable for the partnership’s obligations.  In other words, the LLP combines the flexibility and tax advantages of a partnership with the limited liability of a corporation.

LLPs are sometimes described as limited partnerships without a general partner. It may be more useful to compare a LLP to a limited partnership where the functions of the general partner have been transferred to the limited partners.  The liability protection offered to limited partners reflects the fact that they are passive in relation to the business of the limited partnership.  In a LLP, the partners are assumed to take an active role and are subject to certain liabilities accordingly, as summarized in the corporate comparison below.

The LLP borrows the liability shield from the corporation but remains distinct in most other ways.  A LLP is not a separate legal entity like a corporation.  For tax purposes, the partners of a LLP are taxed on a flow-through basis, while a corporation is taxed separately from its shareholders.

Furthermore, a LLP does not allow for the clear separation of ownership and management that the roles of shareholder and director provide in a corporation.  As a result, a partner in a LLP receives shareholder-like protection but is also subject to director-like liability.  This means that a LLP partner remains liable for his or her own negligent or wrongful actions, for failing to take steps to prevent the known wrongful acts of a partner or employee, and for a number of statutorily imposed obligations including unremitted employee payroll source deductions, unpaid employee wages, and unremitted GST and PST.[/vc_column_text][/vc_column][/vc_row]