Simple Limited Partnership Agreement for Canada

Simple Limited Partnership Agreement Template for Canada

A Simple Limited Partnership Agreement is a legal document used in Canadian jurisdictions to establish and govern a limited partnership structure. It defines the relationship between general partners (who manage the business and have unlimited liability) and limited partners (who are passive investors with liability limited to their investment). The agreement covers essential aspects such as capital contributions, profit sharing, management rights, transfer restrictions, and dissolution procedures, while ensuring compliance with relevant provincial partnership laws and federal tax regulations. This document is particularly suited for smaller business ventures and investment partnerships where a straightforward governance structure is desired.

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What is a Simple Limited Partnership Agreement?

The Simple Limited Partnership Agreement is a fundamental legal document used in Canadian business practice to establish a limited partnership structure that balances the needs of active management and passive investment. This agreement type is particularly valuable when businesses seek to raise capital while maintaining operational control, commonly used in real estate ventures, investment funds, and small to medium-sized business operations. The document clearly delineates the roles, rights, and responsibilities of general partners (who manage the business and assume full liability) and limited partners (who contribute capital but have limited liability and involvement). It includes essential provisions for capital contributions, profit sharing, management authority, transfer restrictions, and partnership dissolution, all while ensuring compliance with provincial partnership laws and federal tax regulations. The Simple Limited Partnership Agreement is designed to be more straightforward than complex partnership structures while still providing adequate protection and clarity for all parties involved.

What sections should be included in a Simple Limited Partnership Agreement?

1. Parties: Identifies and provides details of the general partner(s) and all limited partners entering into the agreement

2. Background: Sets out the context and purpose of forming the limited partnership

3. Definitions: Defines key terms used throughout the agreement

4. Formation of Partnership: Establishes the limited partnership and states its name, purpose, and principal place of business

5. Capital Contributions: Details the initial capital contributions of all partners and terms for additional contributions

6. Partnership Interests: Specifies the percentage interests of all partners and their corresponding economic rights

7. Allocation of Profits and Losses: Describes how profits, losses, and tax items are allocated among partners

8. Distributions: Sets out the policy and procedure for making distributions to partners

9. Management and Control: Outlines the general partner's management rights and limited partners' restricted roles

10. Books and Records: Specifies requirements for maintaining partnership records and partners' access rights

11. Transfer Restrictions: Details restrictions on transferring partnership interests

12. Withdrawal and Removal: Establishes procedures for partner withdrawal and removal

13. Dissolution and Liquidation: Sets out events triggering dissolution and procedures for winding up

14. General Provisions: Contains standard boilerplate provisions including notices, amendments, and governing law

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

1. Key Person Insurance: Required when the partnership depends heavily on specific individuals

2. Tag-Along Rights: Included when minority partners need protection in case of majority partner sale

3. Drag-Along Rights: Used when majority partners may need to force minority partners to join in a sale

4. Additional Capital Calls: Included when partners may be required to make additional capital contributions

5. Advisory Committee: Used in larger partnerships where limited partners need formal oversight mechanisms

6. Investment Guidelines: Required when the partnership has specific investment objectives or restrictions

7. Competing Activities: Included when partners need freedom to participate in competing businesses

8. Tax Matters Partner: Required for larger partnerships needing designated tax representation

What schedules should be included in a Simple Limited Partnership Agreement?

1. Schedule A - Partner Information: Details of all partners including contact information and initial capital contributions

2. Schedule B - Partnership Interests: Complete breakdown of partnership interests and corresponding economic rights

3. Schedule C - Subscription Agreement: Form for admitting new limited partners to the partnership

4. Schedule D - Management Fee Structure: Details of any management fees payable to the general partner

5. Schedule E - Allocation Provisions: Detailed tax and accounting allocation provisions

6. Appendix 1 - Initial Business Plan: Initial business plan and investment strategy of the partnership

7. Appendix 2 - Transfer Notice: Form for notifying partners of intended transfer of partnership interests

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

Real Estate

Private Equity

Venture Capital

Professional Services

Manufacturing

Technology

Retail

Healthcare

Agriculture

Natural Resources

Construction

Investment Management

Family Business

Small Business

Relevant Teams

Legal

Finance

Tax

Compliance

Business Development

Investment

Risk Management

Corporate Governance

Partnership Relations

Operations

Relevant Roles

CEO

Business Owner

Managing Partner

Legal Counsel

Corporate Lawyer

Tax Partner

Investment Manager

Chief Financial Officer

Business Development Manager

Risk Manager

Compliance Officer

Fund Manager

Real Estate Developer

Private Equity Manager

Financial Controller

Company Secretary

Partner Relations Manager

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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