[36] Bill 6 Original (PDF)
B006_E
Bill 6 1998
An Act to amend the law
with respect to Partnerships
Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
PARTNERSHIPS ACT
1. Subsection 1 (1) of the Partnerships Act is amended by adding the following definitions:
"
extra-provincial limited liability partnership" means a limited liability partnership formed under the laws of another jurisdiction but does not include an extra-provincial limited partnership within the meaning of the Limited Partnerships Act\; ("société à responsabilité limitée extraprovinciale")
"
limited liability partnership" means a partnership, other than a limited partnership, that is formed or continued as a limited liability partnership under section 44.1 or that is an extra-provincial limited liability partnership. ("société à responsabilité limitée")
2. (1) Section 10 of the Act is amended by adding at the beginning "Except as provided in subsection (2)".
(2) Section 10 of the Act is amended by adding the following subsections:
Limited liability partnerships
(2) Subject to subsection (3), a partner in a limited liability partnership is not liable, by means of indemnification, contribution, assessment or otherwise, for debts, obligations and liabilities of the partnership or any partner arising from negligent acts or omissions that another partner or an employee, agent or representative of the partnership commits in the course of the partnership business while the partnership is a limited liability partnership.
Liability of negligent partner
(3) Subsection (2) does not affect the liability of a partner in a limited liability partnership for the partner's own negligence or the negligence of a person under the partner's direct supervision or control.
Partner not proper party to action
(4) A partner in a limited liability partnership is not a proper party to a proceeding by or against the limited liability partnership for the purpose of recovering damages or enforcing obligations arising out of the negligent acts or omissions described in subsection (2).
Extra-provincial limited liability partnerships
(5) This section does not apply to an extra-provincial limited liability partnership.
3. Section 13 of the Act is amended by adding at the beginning "Except as provided in subsection 10 (2)".
4. (1) Paragraph 1 of section 24 of the Act is repealed and the following substituted:
1. All the partners are entitled to share equally in the capital and profits of the business, and must contribute equally towards the losses, whether of capital or otherwise, sustained by the firm, but a partner shall not be liable to contribute toward losses arising from a liability for which the partner is not liable under subsection 10 (2).
(2) Section 24 of the Act is amended by adding the following paragraph:
2.1 A partner is not required to indemnify the firm or other partners in respect of debts or obligations of the partnership for which a partner is not liable under subsection 10 (2).
5. Paragraph 1 of section 44 of the Act is repealed and the following substituted:
1. Losses, including losses and deficiencies of capital, are to be paid first out of profits, next out of capital, and lastly, if necessary, by the partners individually in the proportion in which they were entitled to share profits, but a partner is not required to pay any loss arising from a liability for which the partner is not liable under subsection 10 (2).
6. The Act is amended by adding the following sections:
Limited Liability Partnerships
Formation
44.1 (1) A limited liability partnership that is not an extra-provincial limited liability partnership is formed when two or more persons enter into a written agreement that,
(a) designates the partnership as a limited liability partnership; and
(b) states that this Act governs the agreement.
Continuance
(2) A partnership may be continued as a limited liability partnership that is not an extra-provincial limited liability partnership if all of the partners,
(a) enter into an agreement that continues the partnership as a limited liability partnership and states that this Act governs the agreement; or
(b) if there is an existing agreement between the partners that forms the partnership, amend the agreement to designate the partnership as a limited liability partnership and to state that this Act governs the agreement.
Effect of continuance
(3) Upon the continuance of a partnership as a limited liability partnership under subsection (2),
(a) the limited liability partnership possesses all the property, rights, privileges and franchises and is subject to all liabilities, including civil, criminal and quasi-criminal, and all contracts, disabilities and debts of the partnership which were in existence immediately before the continuance; and
(b) all persons who were partners immediately before the continuance remain liable for all debts, obligations and liabilities of the partnership or all partners with respect to the other partners that arose before the continuance.
Limitation on business activity
44.2 A limited liability partnership may carry on business in Ontario only for the purpose of practising a profession governed by an Act and only if,
(a) that Act expressly permits a limited liability partnership to practise the profession;
(b) the governing body of the profession requires the partnership to maintain a minimum amount of liability insurance; and
(c) the partnership complies with section 44.3 if it is not an extra-provincial limited liability partnership or section 44.4 if it is an extra-provincial limited liability partnership.
Business name
44.3 (1) No limited liability partnership formed or continued by an agreement governed by this Act shall carry on business unless it has registered its firm name under the Business Names Act.
Amendments, cancellations and renewals
(2) To amend, renew or cancel a registration of its firm name, a limited liability partnership mentioned in subsection (1) shall register an amendment, renewal or cancellation of a registration in accordance with the requirements of the Business Names Act.
Name
(3) The name of a limited liability partnership mentioned in subsection (1) shall contain the words "limited liability partnership" or "société à responsabilité limitée" or the abbreviations "LLP", "L.L.P." or "s.r.l." as the last words or letters of its name.
Use of registered name only
(4) No limited liability partnership mentioned in subsection (1) shall carry on business under a name other than its registered firm name.
Right to carry on business outside of Ontario
(5) Nothing in this Act prevents a limited liability partnership mentioned in subsection (1) from carrying on its business and exercising its powers in any province or territory of Canada or any other country.
7. The Act is amended by adding the following section:
Extra-provincial limited liability partnerships
44.4 (1) No extra-provincial limited liability partnership shall carry on business in Ontario unless it has registered its name under the Business Names Act.
Amendments, cancellations and renewals
(2) To amend, renew or cancel a registration of its firm name, an extra-provincial limited liability partnership shall register an amendment, renewal or cancellation of a registration in accordance with the requirements of the Business Names Act.
Use of registered name only
(3) No extra-provincial limited liability partnership shall carry on business under a name other than its registered firm name.
Laws of other jurisdiction
(4) The laws of the jurisdiction under which an extra-provincial limited liability partnership is formed shall govern,
(a) its organization and internal affairs; and
(b) the liability of its partners for debts, obligations and liabilities of or chargeable to the partnership or any of its partners.
Service
(5) A person may serve a notice or document on an extra-provincial limited liability partnership at its Ontario place of business, if any, or its address required to be maintained under the laws of the jurisdiction of formation or its principal office address.
8. The Act is amended by adding the following heading immediately before section 45:
General
COMPLEMENTARY AMENDMENTS
9. Subsection 4 (1) of the Business Names Act, as re-enacted by the Statutes of Ontario, 1994, chapter 27, section 72, is amended by adding at the end "or section 44.3 or 44.4 of the Partnerships Act".
10. The Chartered Accountants Act, 1956 is amended by adding the following section:
Limited liability partnership
13.1 Two or more members of the Institute may form a limited liability partnership or continue a partnership as a limited liability partnership within the meaning of the Partnerships Act for the purpose of practising as a chartered accountant.
COMMENCEMENT AND SHORT TITLE
Commencement
11. This Act comes into force on a day to be named by proclamation of the Lieutenant Governor.
Short title
12. The short title of this Act is the Partnerships Statute Law Amendment Act, 1998.
Copyright © 1998
Office of the Legislative Assembly of Ontario
Toronto, Ontario, Canada.