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“Should I Stay or Should I Go?”: Whether to Form a Limited Partnership in Manitoba rather than Ontario

Posted in Private Equity, Private Transactions, Strategy

Limited partnerships are widely used in Ontario (and other Canadian jurisdictions) and have many benefits, including limited liability for limited partners.

However, this benefit is conditional: the Ontario Limited Partnerships Act (the Ontario Act) provides that a limited partner will lose its limited liability status if “the limited partner takes part in the control of the business”. Most other Canadian jurisdictions have legislation governing limited partnerships that contains an analogous provision. Notably, jurisprudence in Ontario and elsewhere in Canada has not yet provided clarity as to what constitutes active control by a limited partner.… Continue Reading