Partnership Agreement (Canada) by OLL
Establish a general partnership for carrying on business in a Canadian common-law province or territory. This template outlines unlimited personal liability, capital contributions, profit distribution schedules, and management authority between two or more partners.
This document comes from OLL's library of vetted legal templates
PARTNERSHIP AGREEMENT
This template is for a general partnership between two or more people or entities carrying on business together in a Canadian common-law province or territory. It is not suitable for a limited partnership, a limited liability partnership, or a corporation. It is not suitable for use in Quebec.
Drafting notes appear in italics and are to be deleted before execution. Square brackets mark information to be filled in. Delete any inapplicable optional clauses and renumber before execution.
This template assumes two Partners for readability. If there are more than two, replicate the parties block and the signature block for each additional Partner, and adjust Schedule A accordingly.
⚠️ Unlimited personal liability. In a general partnership, each Partner's personal assets can be used to satisfy the Partnership's debts and obligations, including obligations created by the other Partners acting in the ordinary course of the Business. This Agreement governs the Partners' rights as between themselves — it does not and cannot limit that exposure to third parties. Partners who want to limit personal liability should take advice on a limited liability partnership (where the Partners' profession permits one) or a corporation with a shareholders' agreement instead.
THIS AGREEMENT is made as of [Date].
BETWEEN:
[Partner 1 Legal Name], of [Partner 1 Address]
("[Partner 1 Short Name]")
— and —
[Partner 2 Legal Name], of [Partner 2 Address]
("[Partner 2 Short Name]")
(each a "Partner" and together the "Partners")
WHEREAS the Partners wish to carry on business together as partners on the terms set out below;
NOW THEREFORE in consideration of the mutual covenants below, the Partners agree as follows:
Formation, Name and Place of Business
The Partners form a general partnership (the "Partnership") under the name "[Partnership Name]", effective [Date].
The Partnership's principal place of business is [Address], or any other location the Partners agree on in writing.
The Partnership is a general partnership. It is not a limited partnership, a limited liability partnership, a corporation, or a joint venture.
This Agreement governs the Partnership between the Partners. Where this Agreement is silent, the default rules in the Partnership Act of the governing province apply. Insert the applicable citation: Ontario – Partnerships Act, R.S.O. 1990, c. P.5; British Columbia – Partnership Act, R.S.B.C. 1996, c. 348; Alberta – Partnership Act, R.S.A. 2000, c. P-3. Confirm the current citation for any other common-law province or territory before use.
If the Partnership carries on business under a name other than the Partners' own legal names, confirm whether the governing province requires the business name to be registered before the Partnership begins operating.
Business Purpose
The Partnership's business is [describe the business] (the "Business"), and any other business the Partners agree to in writing.
Term
The Partnership begins on [Start Date] and continues until dissolved in accordance with section 17.
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About this template
What is this template?
This is a general partnership agreement for Canadian common-law jurisdictions and is not suitable for use in Quebec. It contains specific warnings regarding unlimited personal liability for all partners and includes a formal buyout mechanism using independent valuation or a pre-set formula. It is not intended for limited liability partnerships (LLPs) or limited partnerships (LPs).
When should you use it?
Use this template when two or more parties intend to carry on business together without incorporating or seeking limited liability status. If the parties require a corporate structure with limited liability, use a Shareholders' Agreement instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Formation, Name and Place of Business | Establishes a general partnership under a specific business name and confirms it is not a corporation or limited partnership. |
| 4 | Capital Contributions | Obliges each Partner to contribute the capital amounts listed in Schedule A by a specified date. |
| 5 | Profit, Loss and Distributions | Allocates profits and losses based on the Partnership Interest percentages defined in Schedule A. |
| 6 | Management, Authority and Voting | Grants each Partner agency to bind the Partnership in the usual course of Business unless authority is specifically restricted. |
| 10 | Withdrawal of a Partner | Permits a Partner to exit the Partnership by providing a specific number of days of written notice. |
| 11 | Expulsion of a Partner | Allows the other Partners to remove a Partner for material breach or conduct bringing the Business into serious disrepute. |
| 13 | Valuation and Buyout | Determines the buyout value for departing partners through agreement, independent valuation, or the formula in Schedule B. |
| 14.2 | Non-Competition and Non-Solicitation | Restricts departing Partners from competing with the Business or soliciting clients for a specific number of months post-termination. |
| 15 | Confidentiality | Requires Partners to keep non-public business information private during the term and indefinitely after dissolution. |
Who it's for
- individuals or entities forming a general partnership in a Canadian common-law province
- business owners willing to accept unlimited personal liability for partnership debts
- partners requiring a staged dispute resolution process including negotiation and mediation
- co-owners who need a formal mechanism for partner expulsion and interest valuation
How long it runs and how it's signed
Law it's drafted under
Canada note
This version is drafted for Canada. Provinces differ on employment standards and Quebec applies civil law rather than common law. Tell GitLaw which province applies and it adjusts the draft.
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