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Register Limited Liability Partnership

What is a Limited Liability Partnership (LLP)?

A Limited Liability Partnership is a type of business structure in which each member bears limited personal liability for the partnership’s debts or claims. Partners in an LLP are not held liable for the actions of other partners. An LLP is usually set up by professionals such as accountants, lawyers, consultants and small businesses who want limited liability

Key Features

  1. Limited Liability Protection: Partners are not personally liable for the debts and obligations of the LLP beyond their contributions.
  2. Operational Flexibility: The role of management, decision-making processes and responsibilities can be designed by partners in any way which suits them best.
  3. Separate Legal Entity: An Limited liability partnership is a separate legal entity, different from its partners, which can own assets, enter into contracts, and sue or be sued in its own name.
  4. Tax Advantages: LLPs often benefit from tax advantages, such as being able to distribute profits among partners and potentially lower tax rates compared to other business organizations.
  5. Professional Image: In many industries and professions being an LLP increases credibility hence developing professional image in the market place.

How to Register an LLP in Ontario: A Step-by-Step Guide

Step 1: Determine Eligibility

Not all businesses can incorporate as an LLP in Ontario. This structure is limited to members of specific professions, including:

  • Lawyers
  • Chartered Professional
  • Accountants
  • Architects
  • Engineers

Check with your profession’s regulatory body for specific eligibility criteria.

Step 2: Business Name One Should Select

Your LLP name should be unique and as per the naming rules of Ontario’s business. Here is how you can get started:

Conduct a NUANS Search: Newly Upgraded Automated Name Search – The NUANS report will indicate all existing business names currently in Ontario and Canada. The NUANS report checks the availability of your name against other business names on record. Include “LLP” or “Limited Liability Partnership” in the Name: It justifies the legal entity of your business.

Step 3: Draft a Partnership Agreement (Optional)

Though not necessary for registration, a partnership agreement is quite vital to the smooth running of the business. It provides:

  • The role and responsibility of each partner
  • Profit-sharing ratios
  • Decision-making processes
  • Dispute resolution mechanisms
  • Procedures for adding or removing partners

Step 4: Filling up LLP Registration Form

Obtain an LLP Registration Form from the Ontario Ministry of Public and Business Service Delivery. You will need to provide:

  • The name of the LLP
  • Address of the principal place of business
  • Names and addresses of all the partners
  • Full details of any professional licensing body

Step 5: Get Approval from Your Professional Body

If your LLP operates in a regulated profession, you require approval or a certificate from the governing body. For instance:

  • The Lawyers must get permission from the Law Society of Ontario.
  • Note that accountants must obtain the approval of CPA Ontario.
  • Ensure that this step is complete when submitting your application.

Step 6: Filing the Application

Submit your completed application to the Online Business Registry.

  • Online: It is more convenient, using Ontario’s Online Business Registry.
  • In Person: Visit a ServiceOntario centre near you.
  • By Post: Mail the application to the mailing address of the ministry.

Step 7: Payment of Registration Fee

The cost to file an LLP in Ontario is between $200-$250. Payment options vary depending on the filing method:

  • Online payments can be made by credit or debit card, e-transfer, or PayPal.
  • Cheques or money orders are accepted for mail submissions.

Step 8: Register for Taxation

Depending on your business activities, you may be required to register for:

  • Business Number (BN): This is obtained from the Canada Revenue Agency.
  • HST/GST Account: You need to get one if you’re making more than $30,000 annually.
  • Payroll Account: If you are going to hire employees.

Step 9: Renew Your Registration Annually

To remain active, LLP registrations in Ontario are required to be renewed annually. This is done through the Ontario Business Registry, and the renewal fee is usually less than the initial registration fee.

Compliance and Ongoing Responsibilities

Once you’ve registered your LLP, there are a few ongoing obligations to fulfill:

1. Professional Liability Insurance

Most professional bodies require LLPs to carry specific levels of liability insurance. Check with your governing body for details.

2. Record Keeping

Keep accurate records of the following:

  • Financial transactions
  • Partnership changes
  • Minutes of the meeting and resolutions

3. Filing an update in the Ontario Business Registry

File reports of any changes in your LLP structure, partners, or address within the time limit.

Common Questions About the Registration of an LLP in Ontario

Can I register an LLP for any business in Ontario?

No, LLPs are reserved for certain professional groups regulated by provincial bodies. Unless the business falls under one of these categories, other available structures might be a better fit in the form of a proprietorship, general partnership, or incorporation.

How Long Does the Registration Process Take?

The process usually takes 1-2 weeks if all the documents are in order. In the case of online applications, the whole process may be completed in just 2 business hours.

What happens if I fail to renew the LLP registration?

Failure to renew your registration in time may lead to the dissolution of your LLP. Make sure to renew on time to avoid disruptions.

Why an LLP Might Be Right for You

LLPs are ideal for professionals who want protection of liability and flexibility in operations. However, it is important to know the underlying legal and regulatory issues. If you are not sure about this, then it’s always advisable to consult a business lawyer or accountant for further clarity and peace of mind.

How many partners are required to form an LLP?

In most jurisdictions, an LLP can be formed with a minimum of two partners. Some provinces may have specific requirements regarding the number of partners.

What are the ongoing compliance requirements for LLPs?

LLPs are required to file annual returns, maintain proper accounting records, and comply with tax regulations. Our team can assist with ongoing compliance to ensure your LLP remains in good standing.

Requirements

  • Who Can Do It: Any eligible individuals or organizations can form an LLP within provincial or federal regulations.
  • Documents to Sign: The customer needs to sign the limited liability partnership Agreement, Form 2 – Initial Registered Office Address and First Board of Partners of LLP, and provide other supporting documents as required.

Documents Received by Customer

Upon successful LLP registration, the customer receives:

  1. Certificate of Registration
  2. LLP Agreement
  3. Business Registration Number

Why Is OBR the best choice?

  • Our team comprises legal experts well-versed in LLP formation procedures and regulations.
  • We expedite the registration process to save your time and effort, so you can focus more on growing your business.
  • Our team has over 20 years of experience in this field.
  • We provide continuous support for tax matters, and any other needs your LLP may have after registration.
  • Our pricing is fair and competitive, with no hidden fees, helping you establish an LLP at a reasonable cost.

Conclusion

Registering a type of partnership in Ontario is a straightforward process, provided you follow the steps outlined above. From confirming eligibility to maintaining compliance, each step ensures your LLP operates legally and efficiently. By choosing an LLP, you’re setting up your business for success while protecting your personal assets.

Ready to start your journey? Begin by choosing a unique business name and consulting your professional body for approval. Your LLP awaits!

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