Limited Partnership Agreement for Canada

Limited Partnership Agreement Template for Canada

A comprehensive legal agreement governed by Canadian law that establishes and regulates a limited partnership structure between general partner(s) who manage the partnership and assume unlimited liability, and limited partners who are passive investors with liability limited to their capital contribution. The agreement details capital contributions, profit sharing, management rights, transfer restrictions, and dissolution procedures, while ensuring compliance with both federal and provincial partnership laws. It serves as the foundational document defining the rights, obligations, and relationships between all partners involved in the business venture.

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What is a Limited Partnership Agreement?

The Limited Partnership Agreement is a crucial legal document used in Canadian business structures where certain partners wish to maintain management control while others seek passive investment opportunities with limited liability. This agreement is particularly relevant when establishing investment vehicles, real estate ventures, or professional service firms that require substantial capital investment from multiple parties while maintaining centralized management. The document comprehensively addresses partnership formation, capital contributions, profit sharing, management rights, transfer restrictions, and dissolution procedures, all while ensuring compliance with relevant federal and provincial legislation. It's essential for protecting both general partners (who maintain control and assume full liability) and limited partners (who have limited liability but also limited control rights), making it a fundamental tool for structuring complex business relationships in Canada.

What sections should be included in a Limited Partnership Agreement?

1. Parties: Identification of the general partner(s) and initial limited partners

2. Background: Context of the partnership formation and its intended purpose

3. Definitions: Key terms used throughout the agreement

4. Formation of Partnership: Establishment of the limited partnership, name, office location, and term

5. Purpose and Business: Detailed description of partnership's business objectives and permitted activities

6. Capital Contributions: Initial and subsequent capital contributions, terms and conditions

7. Allocation of Profits and Losses: Method of allocating profits, losses, and tax items among partners

8. Distributions: Rules and procedures for making distributions to partners

9. Management and Control: Powers and duties of the general partner, management structure

10. Rights and Obligations of Partners: Specific rights and duties of both general and limited partners

11. Transfer of Partnership Interests: Rules governing transfer of partnership interests and admission of new partners

12. Withdrawal and Removal: Procedures for partner withdrawal and removal of general partner

13. Dissolution and Liquidation: Events triggering dissolution and procedures for winding up

14. Books and Records: Requirements for maintaining partnership records and partner access rights

15. Representations and Warranties: Partner representations regarding authority, capacity, and compliance

16. General Provisions: Standard contractual provisions including notices, amendments, governing law

What sections are optional to include in a Limited Partnership Agreement?

1. Investment Guidelines: For investment partnerships, specific criteria and limitations for investments

2. Advisory Committee: When the partnership requires an advisory committee structure

3. Key Person Provisions: When specific individuals are crucial to the partnership's operations

4. Co-Investment Rights: When partners have rights to co-invest in partnership opportunities

5. ROFR/ROFO Provisions: Right of first refusal/offer on partnership interest transfers

6. Tag-Along/Drag-Along Rights: For partnerships where these exit rights are relevant

7. Environmental Matters: For partnerships involved in activities with environmental impact

8. Regulatory Compliance: For heavily regulated industries or activities

9. International Operations: For partnerships operating across multiple jurisdictions

What schedules should be included in a Limited Partnership Agreement?

1. Schedule A - Initial Partners and Capital Contributions: List of all initial partners and their committed capital

2. Schedule B - Partnership Interest Calculations: Detailed methodology for calculating partnership interests

3. Schedule C - Allocation Rules: Detailed rules for special allocations and tax treatments

4. Schedule D - Management Fee Structure: Details of management fees and calculation methods

5. Schedule E - Investment Guidelines: Detailed investment criteria and restrictions

6. Schedule F - Subscription Agreement Form: Standard form for new partner subscriptions

7. Schedule G - Transfer Agreement Form: Standard form for partnership interest transfers

8. Appendix 1 - Power of Attorney: Limited partner power of attorney in favor of general partner

9. Appendix 2 - Tax Matters: Detailed tax provisions and elections

10. Appendix 3 - Regulatory Compliance Procedures: Detailed compliance procedures and requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Private Equity

Venture Capital

Real Estate

Infrastructure

Natural Resources

Professional Services

Investment Management

Energy

Manufacturing

Technology

Healthcare

Agriculture

Relevant Teams

Legal

Finance

Compliance

Corporate Development

Investment Management

Tax

Risk Management

Business Development

Corporate Governance

Administrative Services

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

General Counsel

Managing Partner

Investment Manager

Fund Manager

Corporate Lawyer

Tax Director

Partnership Administrator

Compliance Officer

Business Development Director

Investment Analyst

Risk Manager

Corporate Secretary

Financial Controller

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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