Creating a limited partnership in Québec: step-by-step
What is a limited partnership?
A limited partnership is a form of company in which the partners are divided into two categories: general partners, who are liable for the company’s debts up to the amount of their contributions, and limited partners, who are liable for debts only up to the amount of their contributions. There is no separation between the partners and the company, which means that the partners are personally liable for the company’s debts.
Legal definition of a limited partnership
Quebec legislation defines a limited partnership as a business operated by one or more general partners and one or more limited partners. Unlike a corporation, a limited partnership is not a legal entity separate from its partners.
Considerations specific to Quebec
Under Quebec law, companies are generally required to use French in their public communications. In addition, you need to be aware of the Goods and Services Tax (GST) and the Quebec Sales Tax (QST).
Characteristics of a limited partnership
A limited partnership differs from other legal forms in several ways. The general partners have full control of the company, while the limited partners have no right to participate in the management of the business.
Advantages and disadvantages of a limited partnership
Advantages of creating a limited partnership
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- Easy to set up.
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- Limited partners can limit their liability.
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- Possibility for general partners to control the company.
Disadvantages of creating a limited partnership
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- Unlimited liability for general partners.
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- Limited partners may not participate in the management of the company.
Steps to launch your limited partnership
Steps to launch your limited partnership
1. Validation of the idea
Before you begin the process of creating your limited partnership, it’s important to validate your business idea. This may involve conducting market research, defining your target audience, understanding your unique value proposition, etc. You can find more information on idea validation here.
2. Writing a business plan
Writing a business plan is an essential step in defining your business strategy, objectives, revenue model and so on. You can find out more about writing a business plan here.
3. Choose a name for your limited partnership
You can use your own name or choose another name for your limited partnership. If you choose a name other than your own, you must ensure that it is not already in use. You can check the availability of the name on the Registraire des entreprises du Québec website.
4. Register with the Registraire des entreprises du Québec (REQ)
Once you’ve chosen a name for your limited partnership, you’ll need to register it with the Registraire des entreprises du Québec (REQ). You can do this by filling out a form on the REQ website.
5. Registration with Revenu Québec
After registering your limited partnership with REQ, you must register with Revenu Québec. This allows Revenu Québec to identify you as a business, and is necessary for tax purposes.
6. Compliance by sector of activity
Depending on the sector in which your limited partnership operates, there may be specific obligations that you must meet. You can find more information on obligations by business sector here.
These steps provide a general overview of the process of creating a limited partnership in Québec. However, each situation is unique and may require additional or different steps. We therefore recommend that you consult a professional for advice specific to your situation.
Register with the Registraire des entreprises du Québec (REQ)
To register, you’ll need to fill out a form to declare the creation of your limited partnership. The form is available on the REQ website.
Registration with Revenu Québec
This step enables Revenu Québec to identify you as a company.
Legal obligations of the company
Once registered, a company must comply with annual legal obligations. For more information, consult the “Legal obligations arising from registration” page on the Registraire des entreprises du Québec website.
Customer service
Registraire des entreprises customer services are provided by Services Québec at its offices in Montreal or Quebec City, as well as by e-mail or telephone. Customer service staff can help you understand, in particular, the business registration process and the application of legal rules in general. However, they cannot interpret the rules to suit a specific case or respond to a specific situation. For such help, consult a legal advisor.
Please note that this structure is based on the article you provided, and that specific information on creating a limited partnership in Quebec may vary. It is recommended that you consult a lawyer or business law expert for accurate and timely advice