Can a corporation be a partner in an Ontario general partnership?
Yes. Ontario partnership law doesn't restrict partners to individuals — a corporation, as its own legal person, can be a partner in a general partnership alongside individuals or other corporations. This is a common structure, for example, when a business wants to pursue a specific project through a partnership while keeping that exposure inside a corporate entity rather than exposing an individual's personal assets directly.
The trade-off is that using a corporation as the partner doesn't eliminate the partnership's unlimited-liability exposure — it just relocates it. The corporation itself, as the partner, is jointly and severally liable for the partnership's debts and for the other partners' acts done in the ordinary course of the partnership's business, to the same extent an individual partner would be. The corporation's own shareholders generally retain their separate limited-liability protection from the corporation's obligations, including its partnership liability, subject to the usual narrow exceptions like personal guarantees. This structure is often used deliberately to contain partnership risk within a specific corporate vehicle rather than exposing individuals or an operating company's broader assets directly.
Key takeaways
- A corporation can be a partner in an Ontario general partnership, just like an individual
- The corporation as partner carries the same unlimited joint and several liability
- This relocates partnership risk into the corporate entity rather than eliminating it
- The corporation's own shareholders generally keep their separate liability protection