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RSNL1990 CHAPTER P-3

PARTNERSHIP ACT

Amended:

1996 cJ-1.1 s197; 2008 c24; 2017 c10 s22

CHAPTER P-3

AN ACT RESPECTING PARTNERSHIPS

Analysis


       
1.   Short title

       
2.   Definitions

              PART I
RESPECTING PARTNERSHIPS GENERALLY

       
3.   Rules

       
4.   Postponement of rights

       
5.   Meaning of firm

       
6.   Power of partner to bind firm

       
7.   Partners bound by acts on behalf of firm

       
8.   Partner using credit of firm for private purposes

       
9.   Effect of notice that firm will not be bound

     
10.   Liability of partners

     
11.   Liability of the firm for wrongs

     
12.   Misapplication of money

     
13.   Liability for wrongs, joint and individual

     
14.   Improper employment of trust property

     
15.   Persons liable by 'holding out'

     
16.   Admission and representation of partners

     
17.   Notice to acting partner to be notice to firm

     
18.   Liabilities of incoming and outgoing partners

     
19.   Revocation of continuing guarantee

     
20.   Variation by consent

     
21.   Partnership property

     
22.   Property bought with partnership money

     
23.   Rep. by 1996 cJ-1.1 s197

     
24.   Rules as to interests

     
25.   Expulsion of partner

     
26.   Retirement from partnership at will

     
27.   Partnership continued

     
28.   Duty of partners

     
29.   Accountability of partners for private profits

     
30.   Duty of partner not to compete with firm

     
31.   Rights of assignee of share in partnership

     
32.   Dissolution by expiration or notice

     
33.   Dissolution by insolvency, death or change

     
34.   Dissolution of partnership

     
35.   Dissolution by the court

     
36.   Rights of persons dealing with firm

     
37.   Right of partners on dissolution

     
38.   Continuing authority of partners

     
39.   Rights of partners re partnership property

     
40.   Premium where partnership prematurely dissolved

     
41.   Partnership dissolved for fraud

     
42.   Right of outgoing partner to share profits

     
43.   Retiring or deceased partner's share

     
44.   Rule for distribution of assets

     
45.   Saving for rules of equity and common law

              PART II
LIMITED LIABILITY PARTNERSHIPS

     
46.   Definitions

     
47.   Application of Act

     
48.   Limited liability

     
49.   Partners subject to same obligations as corporate directors

     
50.   Previous partnership obligations

     
51.   Restrictions on distribution of partnership property on winding up

     
52.   Partnership status in winding up

     
53.   Liability of partner for prohibited distribution

     
54.   Successor partnership

     
55.   Application for registration as limited liability partnership

     
56.   Professional partnership

     
57.   Certificate of registration

     
58.   Change of partners

     
59.   Registration does not dissolve partnership

     
60.   Legal elements in name

     
61.   Notice to clients

     
62.   Registered office

     
63.   List of partners

     
64.   Annual return

     
65.   Notice of change

     
66.   Non-registered status

     
67.   Application to register as extra-provincial limited liability partnership

     
68.   Professional partnership

     
69.   Certificate of registration

     
70.   Change in partners

     
71.   Legal elements in name

     
72.   Notice to clients

     
73.   Registered office

     
74.   List of partners

     
75.   Annual return

     
76.   Notice of change

     
77.   Law of governing jurisdiction

     
78.   Restrictions on name

     
79.   Notice of dissolution

     
80.   Application of law of governing jurisdiction

     
81.   Cancellation of registration

     
82.   Service


Short title

        1. This Act may be cited as the Partnership Act.

RSN1970 c287 s1

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Definitions

        2. In this Act,

             (a)  "business" includes a trade, occupation or profession;

             (b)  "court" means the Trial Division;

             (c)  "partnership" means the relation which exists between persons carrying on a business in common with a view to make a profit but does not include the relation between members of a company or association which is

                      (i)  registered as a company under the Corporations Act or another Act of the Legislature which is in force and relates to the registration of companies, or

                     (ii)  formed or incorporated by another Act of the Legislature or letters patent, or royal charter; and

             (d)  "registrar" means the registrar as defined in the Corporations Act.

RSN1970 c287 ss2&45; 2017 c10 s22

PART I
RESPECTING PARTNERSHIPS GENERALLY

2008 c24 s1

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Rules

        3. In determining whether a partnership exists, regard shall be had to the following rules:

             (a)  joint tenancy, tenancy in common, joint property, common property, or part ownership does not of itself create a partnership, as to anything held or owned, whether or not the tenants or owners share profits arising from the holding or ownership;

             (b)  the sharing of gross returns does not of itself create a partnership whether or not the persons sharing the returns have a joint or common right or interest in property from which or from the use of which the returns are derived;

             (c)  the receipt by a person of a share of the profits of a business is, in the absence of evidence to the contrary, evidence that he or she is a partner in the business, but the receipt of the share or of a payment contingent on or varying with the profits of a business, does not of itself make that person a partner in the business; and in particular

                      (i)  the receipt by a person of a debt or other liquidated amount by instalments or otherwise out of the accruing profits of a business does not of itself make that person a partner in the business or liable as a partner,

                     (ii)  a contract for the remuneration of an employee or agent of a person engaged in a business by a share of the profits of the business does not of itself make the employee or agent a partner in the business or liable as a partner,

                    (iii)  a person being the surviving spouse or child of a deceased partner and receiving by annuity a portion of the profits made in the business in which the deceased person was a partner is not by reason only of that receipt a partner in the business or liable as a partner,

                    (iv)  the advance of money by loan to a person engaged, or about to engage, in a business, on a contract with that person that the lender shall receive a rate of interest varying with the profits or shall receive a share of the profits arising from carrying on the business does not of itself make the lender a partner with the persons carrying on the business or liable as a partner; as long as the contract is in writing and signed by or on behalf of the parties to the contract,

                     (v)  a person receiving by annuity or otherwise, a portion of the profits of a business in consideration of the sale by that person of the goodwill of the business is not by reason only of that receipt a partner in the business or liable as a partner.

RSN1970 c287 s3

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Postponement of rights

        4. Where a person to whom money has been advanced by loan upon the contract of a buyer of a goodwill in consideration of a share of the profits of the business is declared insolvent, enters into an arrangement to pay his or her creditors less than 100 cents in the dollar, or dies in insolvent circumstances, the lender of the loan shall not be entitled to recover anything in respect of the loan, and the seller of the goodwill shall not be entitled to recover anything in respect of the share of profits contracted for, until the claims of the other creditors of the borrower or buyer for valuable consideration in money or money's worth have been satisfied.

RSN1970 c287 s4

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Meaning of firm

        5. Persons who have entered into partnership with one another are for the purpose of this Act called collectively a firm, and the name under which their business is carried on is called the firm name.

RSN1970 c287 s5

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Power of partner to bind firm

        6. (1) A partner is an agent of the firm and of his or her other partners for the purpose of the business of the partnership.

             (2)  The acts of a partner who does an act for carrying on in the usual way business of the kind carried on by the firm of which he or she is a member, bind the firm and the partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom that partner is dealing, either knows that he or she has no authority, or does not know or believe him or her to be a partner.

RSN1970 c287 s6

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Partners bound by acts on behalf of firm

        7. (1) An act or instrument relating to the business of the firm and done or executed in the firm name, or in another manner showing an intention to bind the firm, by an authorized person, whether a partner or not, is binding on the firm and the partners.

             (2)  Subsection (1) does not affect a general rule of law relating to the execution of deeds or negotiable instruments.

RSN1970 c287 s7

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Partner using credit of firm for private purposes

        8. Where 1 partner pledges the credit of the firm for a purpose apparently not connected with the firm's ordinary course of business, the firm is not bound unless the partner is in fact specially authorized by the other partners; but this section does not affect personal liability incurred by an individual partner.

RSN1970 c287 s8

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Effect of notice that firm will not be bound

        9. Where it has been agreed between the partners that a restriction shall be placed on the power of 1 or more of them to bind the firm, an act done in contravention of the agreement is not binding on the firm with respect of persons having notice of the agreement.

RSN1970 c287 s9

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Liability of partners

      10. A partner in a firm is liable jointly with the other partners for debts and obligations of the firm incurred while he or she is a partner; and after the partner's death his or her estate is also individually liable in a due course of administration for the debts and obligations where they remain unsatisfied but subject to the prior payment of the partner's separate debts.

RSN1970 c287 s10

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Liability of the firm for wrongs

      11. Where, by the wrongful act or omission of a partner, acting in the ordinary course of the business of the firm, or with the authority of his or her co-partners, loss or injury is caused to a person not being a partner in the firm or a penalty is incurred, the firm is liable to the same extent as the partner so acting or omitting to act.

RSN1970 c287 s11

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Misapplication of money

      12. Where

             (a)  1 partner acting within the scope of his or her apparent authority receives the money or property of a 3rd person and misapplies it; and

             (b)  a firm in the course of its business receives money or property of a 3rd person, and the money or property so received is misapplied by 1 or more of the partners while it is in the custody of the firm,

the firm is liable to make good the loss.

RSN1970 c287 s12

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Liability for wrongs, joint and individual

      13. A partner is liable jointly with his or her co-partners and also individually for everything for which the firm, while he or she is a partner, becomes liable under section 11 or 12.

RSN1970 c287 s13

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Improper employment of trust property

      14. Where a partner, being a trustee, improperly employs trust property in the business or on the account of the partnership, no other partner is liable for the trust property to the persons beneficially interested in it, but

             (a)  this section shall not affect a liability incurred by a partner because of his or her having notice of a breach of trust; and

             (b)  nothing in this section shall prevent trust money from being followed and recovered from the firm if still in its possession or under its control.

RSN1970 c287 s14

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Persons liable by 'holding out'

      15. (1) A person who by words spoken or written, or by conduct represents or who knowingly permits himself or herself to be represented, as a partner in a particular firm is liable as a partner to anyone who has on the faith of the representation given credit to the firm, whether the representation has or has not been made or communicated to the person so giving credit by or with the knowledge of the apparent partner making the representation or permitting it to be made.

             (2)  Where, after a partner's death, the partnership business is continued in the old firm name, the continued use of that name or of the deceased partner's name shall not of itself make his or her executor's or administrator's estate or effects liable for partnership debts contracted after his or her death.

RSN1970 c287 s15

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Admission and representation of partners

      16. An admission or representation made by a partner concerning the partnership affairs, in the ordinary course of its business, is evidence against the firm.

RSN1970 c287 s16

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Notice to acting partner to be notice to firm

      17. Notice to a partner who habitually acts in the partnership business of a matter relating to partnership affairs operates as notice to the firm, except in the case of a fraud on the firm committed by or with the consent of that partner.

RSN1970 c287 s17

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Liabilities of incoming and outgoing partners

      18. (1) A person who is admitted as a partner into an existing firm does not become liable to the creditors of the firm for anything done before the person became a partner.

             (2)  A partner who retires from a firm does not stop being liable for partnership debts or obligations incurred before his or her retirement.

             (3)  A retiring partner may be discharged from an existing liability by an agreement to that effect between himself or herself and the members of the firm as newly constituted and the creditors, and this agreement may be either expressed or inferred as a fact from the course of dealing between the creditors and the firm as newly constituted.

RSN1970 c287 s18

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Revocation of continuing guarantee

      19. A continuing guarantee or cautionary obligation given either to a firm or a 3rd person in respect to the transactions of a firm is, in the absence of agreement to the contrary, revoked as to future transactions by a change in the constitution of the firm to which, or of the firm in respect of the transactions of which the guarantee or obligation was given.

RSN1970 c287 s19

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Variation by consent

      20. The mutual rights and duties of partners, whether ascertained by agreement or defined by this Act, may be varied by the consent of the partners, and the consent may be either expressed or inferred from a course of dealing.

RSN1970 c287 s20

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Partnership property

      21. (1) Property and rights and interest in property originally brought into the partnership stock or acquired, whether by purchase or otherwise on account of the firm, or for the purposes and in the course of the partnership business, are partnership property, and must be held and applied by the partners exclusively for the purposes of the partnership and in accordance with the partnership agreement.

             (2)  The legal estate or interest in land which belongs to the partnership shall devolve according to the nature and tenure of it and the general rules of law but in trust where necessary for the persons beneficially interested in the land under this section.

             (3)  Where co-owners of an estate or interest in land not being itself partnership property, are partners as to profits made by the use of that land or estate, and purchase other land or estate out of the profits to be used in the same manner, the land or estate so purchased belong to them, in the absence of agreement to the contrary, not as partners, but as co-owners for the same respective estates and interests as are held by them in the land or estate first mentioned at the date of purchase.

RSN1970 c287 s21

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Property bought with partnership money

      22. Unless the contrary intention appears, property bought with money belonging to the firm is considered to have been bought by the firm.

RSN1970 c287 s22

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Rep. by 1996 cJ-1.1 s197

      23. [Rep. by 1996 cJ-1.1 s197]

1996 cJ-1.1 s197

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Rules as to interests

      24. The interests of partners in the partnership property and their rights and duties in relation to the partnership shall be determined, subject to an agreement express or implied between the partners, by the following rules:

             (a)  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;

             (b)  the firm must indemnify a partner in respect of payments made and personal liabilities incurred by that partner

                      (i)  in the ordinary and proper conduct of the business of the firm, or

                     (ii)  in or about anything necessarily done for the preservation of the business or property of the firm;

             (c)  a partner making for the purpose of the partnership an actual payment or advance beyond the amount of capital which he or she agreed to sign, is entitled to interest at the rate of 6% yearly from the date of the payment or advance;

             (d)  a partner is not entitled before the ascertainment of profits, to interest on the capital signed by him or her;

             (e)  a partner may take part in the management of the partnership business;

             (f)  a partner shall not be entitled to remuneration for acting in the partnership business;

             (g)  a person may not be introduced as a partner without the consent of existing partners;

             (h)  a difference arising as to ordinary matters connected with the partnership business may be decided by a majority of the partners, but a change may not be made in the nature of the partnership business without the consent of existing partners; and

              (i)  the partnership books are to be kept at the place of business of the partnership, or at the principal place, and a partner may have access to and copy the books.

RSN1970 c287 s24

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Expulsion of partner

      25. A majority of the partners cannot expel a partner, unless a power to do so has been conferred by express agreement between the partners.

RSN1970 c287 s25

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Retirement from partnership at will

      26. (1) Where a fixed time has not been agreed upon for the duration of the partnership, a partner may determine the partnership on giving notice of his or her intention to do so to the other partners.

             (2)  Where the partnership has originally been constituted by deed, a written notice, signed by the partner giving it, shall be sufficient for this purpose.

RSN1970 c287 s26

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Partnership continued

      27. (1) Where a partnership entered into for a fixed term is continued after the term has expired, and without an express new agreement, the rights and duties of the partners remain the same as they were at the expiration of the term, where it is consistent with the incidents of a partnership at will.

             (2)  A continuance of the business by the partners or those partners that habitually acted during the term, without a settlement or liquidation of the partnership affairs, is presumed to be a continuance of the partnership.

RSN1970 c287 s27

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Duty of partners

      28. Partners are bound to make true accounts and full information of things affecting the partnership to a partner or his or her legal representatives.

RSN1970 c287 s28

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Accountability of partners for private profits

      29. (1) A partner must account to the firm for a benefit derived by the partner without the consent of the other partners from a transaction concerning the partnership or from a use by him or her or the partnership property, name or business connection.

             (2)  This section applies also to transactions undertaken after a partnership has been dissolved by the death of a partner, and before the affairs of it have been completely wound up, either by a surviving partner or by the representatives of the deceased partner.

RSN1970 c287 s29

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Duty of partner not to compete with firm

      30. Where a partner without the consent of the other partners, carries on a business of the same nature as and competing with that of the firm, he or she must account for and pay over to the firm profits made by the partner in that business.

RSN1970 c287 s30

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Rights of assignee of share in partnership

      31. (1) An assignment by a partner of his or her share in the partnership, either absolute or by mortgage or redeemable charge, does not, as against the other partners entitle the assignee, during the continuance of the partnership, to interfere in the management or administration of the partnership, business or affairs, or to require accounts of the partnership transactions, or to inspect the partnership books, but entitles the assignee only to receive the share of profits to which the assigning partner would otherwise be entitled, and the assignee must accept the account of profits agreed to by the partners.

             (2)  In case of a dissolution of the partnership, whether as respects the partners or as respects the assigning partner, the assignee is entitled to receive the share of the partnership assets to which the assigning partner is entitled as between himself or herself and the other partners, and, for the purpose of ascertaining that share, to an account as from the date of the dissolution.

RSN1970 c287 s31

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Dissolution by expiration or notice

      32. (1) Subject to an agreement between the partners, a partnership is dissolved,

             (a)  where entered into for a fixed term by the expiration of that term;

             (b)  where entered into for a single adventure or undertaking, by the termination of that adventure or undertaking;

             (c)  where entered into for an undefined time, by a partner giving notice to the other of his or her intention to dissolve the partnership.

             (2)  Where a partner gives notice to the others under paragraph (1)(c), the partnership is dissolved from the date mentioned in the notice as the date of dissolution, or, where no date is mentioned from the date of the communication of the notice.

RSN1970 c287 s32

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Dissolution by insolvency, death or change

      33. (1) Subject to an agreement between the partners, a partnership is dissolved as regards the partners, by the death or insolvency of a partner.

             (2)  A partnership may, at the option of the other partners, be dissolved where a partner suffers his or her share of the partnership property to be charged under this Act for his or her separate debt.

RSN1970 c287 s33

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Dissolution of partnership

      34. A partnership is dissolved by the happening of an event which makes it unlawful for the business of the firm to be carried on, or for the members of the firm to carry it on in partnership.

RSN1970 c287 s34

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Dissolution by the court

      35. On application by a partner, the court may decree a dissolution of the partnership in the following cases:

             (a)  where a partner is found to be mentally incompetent, the application may be made on behalf of that partner by his or her committee or next friend or person having title to intervene, or by another partner;

             (b)  where a partner, other than the partner suing, becomes permanently incapable of performing his or her part of the partnership contract;

             (c)  where a partner, other than the partner suing, has been guilty of conduct that, in the opinion of the court, regard being had to the nature of the business, is calculated to prejudicially affect the carrying on of the business;

             (d)  where a partner, other than the partner suing, wilfully or persistently commits a breach of the partnership agreement, or otherwise so conducts himself or herself in matters relating to the partnership business that it is not reasonably practicable for the other partner to carry on the business in partnership;

             (e)  where the business of the partnership can only be carried on at a loss;

             (f)  where circumstances have arisen which, in the opinion of the court, make it just and equitable that the partnership be dissolved.

RSN1970 c287 s35

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Rights of persons dealing with firm

      36. (1) Where a person deals with a firm after a change in its constitution, the person is entitled to treat apparent members of the old firm as still being members of the firm, until he or she has notice of the change.

             (2)  An advertisement in the Gazette and 1 other newspaper published in this province, shall be notice to persons who had no dealings with the firm before the date of the dissolution or change so advertised.

             (3)  The estate of a partner who dies, or who becomes insolvent, or of a partner who, not having been known to the person dealing with the firm to be a partner, retires from the firm, is not liable for partnership debts contracted after the date of the death, insolvency, or retirement.

RSN1970 c287 s36

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Right of partners on dissolution

      37. On the dissolution of a partnership, or retirement of a partner, a partner may notify the public of the change and may require the other partners to concur for that purpose in necessary or appropriate acts which cannot be done without his or her concurrence.

RSN1970 c287 s37

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Continuing authority of partners

      38. (1) After the dissolution of a partnership the authority of a partner to bind the firm, and the other rights and obligations of the partners continue where it may be necessary to wind up the affairs of the partnership, and to complete transactions begun but unfinished at the time of the dissolution.

             (2)  The firm is not bound by the acts of a partner who has become insolvent but this does not affect the liability of a person who has after the insolvency represented or knowingly permitted himself or herself to be represented as a partner of the insolvent.

RSN1970 c287 s38

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Rights of partners re partnership property

      39. On the dissolution of a partnership, a partner is entitled, as against the other partners in the firm, and persons claiming through them in respect of their interests as partners, to have the property of the partnership applied in payment of the debts and liabilities of the firm, and to have the surplus assets after the payment applied in payment of what may be due to the partners, respectively, after deducting what may be due from them as partners to the firm; and for that purpose a partner or his or her representatives may, on the termination of the partnership, apply to the court to wind up the business and affairs of the firm.

RSN1970 c287 s39

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Premium where partnership prematurely dissolved

      40. Where 1 partner has paid a premium to another on entering into a partnership for a fixed term, and the partnership is dissolved before the expiration of that term otherwise than by the death of a partner, the court may order the repayment of the premium, or of the part of it that it thinks just, having regard to the terms of the partnership contract and to the length of time during which the partnership has continued; unless

             (a)  the dissolution is in the judgment of the court, wholly or chiefly due to the misconduct of the partner who paid the premium; or

             (b)  the partnership has been dissolved by an agreement containing no provision for a return of a part of the premium.

RSN1970 c287 s40

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Partnership dissolved for fraud

      41. Where a partnership contract is rescinded on the ground of the fraud or misrepresentation of 1 of the parties to it, the party entitled to rescind is, without prejudice to other rights, entitled

             (a)  to a lien on, or right of retention of, the surplus of the partnership assets, after satisfying the partnership liabilities, for a sum of money paid by him or her for the purchase of a share in the partnership and for capital contributed by him or her;

             (b)  to stand in the place of the creditors of the firm for a payment made by him or her in respect of the partnership liabilities; and

             (c)  to be indemnified by the person guilty of the fraud or making the representation against the debts and liabilities of the firm.

RSN1970 c287 s41

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Right of outgoing partner to share profits

      42. (1) Where a member of a firm has died or otherwise stopped being a partner, and the surviving or continuing partners carry on the business of the firm with its capital and assets, without a final settlement of accounts as between the firm and the outgoing partner or his or her estate, then in the absence of an agreement to the contrary, the outgoing partner or his or her estate is entitled to the share of the profits made since the dissolution that the court may find to be attributable to the use of his or her share of the partnership assets, or interest at the rate of 6% annually on the amount of his or her share of the partnership assets.

             (2)  Where, by the partnership contract, an option is given to surviving or continuing partners to purchase the interest of a deceased or outgoing partner, and that option is exercised, the estate of the deceased partner, or the outgoing partner, is not entitled to a further share of profits.

             (3)  Where a partner claims to act in exercise of the option does not in material respects comply with the terms of it, the partner is liable to account under this section.

RSN1970 c287 s42

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Retiring or deceased partner's share

      43. Subject to an agreement between the partners, the amount due from surviving or continuing partners to an outgoing partner, or the representatives of a deceased partner, in respect of the outgoing or deceased partner's share, is a debt accruing at the date of the dissolution or death.

RSN1970 c287 s43

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Rule for distribution of assets

      44. In settling accounts between the partners after a dissolution of partnership, the following rules shall, subject to an agreement, be observed:

             (a)  losses, including losses and deficiencies of capital, shall be paid 1st out of profits, next out of capital, and lastly, where necessary, by the partners individually in the proportion in which they were entitled to share profits; and

             (b)  the assets of the firm, including the sums, contributed by the partners to make up losses or deficiencies of capital shall be applied in the following manner and order

                      (i)  in paying debts and liabilities of the firm to persons who are not partners,

                     (ii)  in paying to each partner rateably what is due from the firm to the partner for advances as distinguished from capital,

                    (iii)  in paying to each partner rateably what is due from the firm to the partner in respect of capital, and

                    (iv)  the ultimate residue shall be divided among the partners in the proportion in which profits are divisible.

RSN1970 c287 s44

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Saving for rules of equity and common law

      45. The rules of equity and common law applicable to partnership shall continue in force, except where they are inconsistent with the express provisions of this Act.

RSN1970 c287 s46

PART II
LIMITED LIABILITY PARTNERSHIPS

2008 c24 s2

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Definitions

      46. In this Part

             (a)  "distribution" means, in relation to partnership property, a transfer of money or other partnership property by a partnership to a partner or an assignee of a partner's share in the partnership, whether as a share of profits, return of contributions to capital, repayment of advances or otherwise;

             (b)  "extra-provincial limited liability partnership" means a partnership registered under section 69 as an extra-provincial limited liability partnership;

             (c)  "governing jurisdiction" means, in relation to a partnership, the jurisdiction whose law governs the interpretation of the partnership agreement by operation of law or through a provision in the partnership agreement or another document created by the partnership;

             (d)  "limited liability partnership" means a partnership registered under section 57 as a limited liability partnership;

             (e)  "partnership obligation" means a debt, obligation or liability of a partnership, other than debts, obligations or liabilities of partners as between themselves or as between themselves and the partnership;

             (f)  "profession" means a profession or occupation that is governed or regulated by a body created by or under an Act; and

             (g)  "professional partnership" means a partnership through which one or more persons carry on the practice of a profession.

2008 c24 s2

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Application of Act

      47. Part I applies to a limited liability partnership and to an extra-provincial limited liability partnership except in so far as that Part is inconsistent with this Part.

2008 c24 s2

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Limited liability

      48. (1) Except as expressly provided in this Part, in another Act or in an agreement, a partner in a limited liability partnership

             (a)  is not personally liable for a partnership obligation solely by reason of being a partner;

             (b)  is not personally liable for an obligation under an agreement between the partnership and another person; and

             (c)  is not personally liable to the partnership or another partner by way of contribution, indemnity or otherwise, in respect of an obligation to which paragraph (a) or (b) applies.

             (2)  Subsection (1) does not relieve a person who is a partner in a limited liability partnership from personal liability for a negligent or otherwise wrongful act or omission, malpractice or misconduct of the person for which that person would be personally liable if the person were not a partner.

             (3)  Subsection (1) does not protect a partner's interest in the partnership property from claims against the partnership in respect of a partnership obligation.

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Partners subject to same obligations as corporate directors

      49. (1) Partners in a limited liability partnership are personally liable for a partnership obligation for which they would be liable if the partnership were a corporation of which they were directors.

             (2)  Where a corporation is a partner in a limited liability partnership, the directors of the corporation are jointly and individually liable for a liability imposed on the corporation under subsection (1).

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Previous partnership obligations

      50. Nothing in this Part limits the liability of partners in a limited liability partnership for a partnership obligation that

             (a)  arose before the partnership became a limited liability partnership; or

             (b)  arises out of a contract entered into before the partnership became a limited liability partnership.

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Restrictions on distribution of partnership property on winding up

      51. (1) A limited liability partnership shall not make a distribution of partnership property in connection with the winding up of its affairs unless all partnership obligations have been paid or satisfactory provision for their payment has been made.

             (2)  In circumstances other than in connection with the winding up of its affairs, a limited liability partnership shall not make a distribution of partnership property if there are reasonable grounds to believe that after the distribution

             (a)  the partnership would be unable to pay its partnership obligations as they come due; or

             (b)  the value of the partnership property would be less than the partnership obligations.

             (3)  Subsections (1) and (2) do not prohibit a payment made as reasonable compensation for current services provided by a partner to the limited liability partnership, to the extent that the payment would be reasonable if paid to an employee who was not a partner as compensation for similar services.

             (4)  A limited liability partnership may base its determination of whether a distribution is prohibited by subsection (2)

             (a)  on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances;

             (b)  on a fair valuation; or

             (c)  on another method that is reasonable in the circumstances.

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Partnership status in winding up

      52. (1) Where a limited liability partnership dissolves and its affairs are to be wound up, the partnership maintains its status as a limited liability partnership while its affairs are being wound up.

             (2)  A limited liability partnership is considered, for the purpose of this section and subsection 51 (1), to have dissolved and to be winding up its affairs where

             (a)  the partnership ceases to carry on business; or

             (b)  there is a change in the membership of the partnership and there is not a successor partnership within the meaning of section 54 .

             (3)  Where a limited liability partnership has dissolved and its affairs are being wound up, the Trial Division may on the application of an interested person make an order with respect to the partnership that could be made with respect to a corporation under subsection 211(8) of the Canada Business Corporations Act .

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Liability of partner for prohibited distribution

      53. (1) A partner in a limited liability partnership who receives a distribution contrary to section 51 is liable to the partnership for the lesser of

             (a)  the value of the property received by the partner; and

             (b)  the amount necessary to discharge partnership obligations that existed at the time of the distribution.

             (2)  A partner in a limited liability partnership who authorizes a distribution contrary to section 51 is jointly and individually liable to the partnership for an amount for which a recipient is liable under subsection (1), to the extent that the amount is not recovered from the recipient.

             (3)  Proceedings to enforce a liability under this section may be brought by the limited liability partnership, a partner in the partnership or a person to whom the partnership was obligated at the time of the distribution to which the liability relates.

             (4)  Proceedings to enforce a liability under this section may not be commenced later than 2 years after the date of the distribution to which the liability relates.

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Successor partnership

      54. (1) For the purpose of this Part, a new partnership is the successor partnership of an original partnership where

             (a)  at a particular time, the original partnership is registered as a limited liability partnership;

             (b)  immediately after that time, a new partnership with different partners is carrying on the business of the original partnership;

             (c)  one or more of the partners in the original partnership are members of the new partnership; and

             (d)  there is an express or implied agreement between the partners in the original partnership and the new partnership that the new partnership will assume all partnership obligations of the original partnership.

             (2)  A successor partnership is considered to be the same partnership as the original partnership for the purpose of this Part and is subject to all the partnership obligations of the original partnership.

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Application for registration as limited liability partnership

      55. (1) A partnership consisting of partners who practice in an eligible profession may apply to register the partnership as a limited liability partnership by submitting to the registrar, on behalf of the partnership, an application in the form the registrar may require.

             (2)  A limited partnership may not be registered as a limited liability partnership.

             (3)  An application under subsection (1) shall include

             (a)  the name of the partnership;

             (b)  a description of the eligible profession in which the partners practise;

             (c)  the name and residential address in the province of the partner who is designated as the representative of the partnership with respect to matters relating to the partnership;

             (d)  the address of the registered office of the partnership in the province;

             (e)  a statement from a person who is authorized by the governing body of the applicable eligible profession to provide the statement certifying that the partnership and the partners meet all applicable eligibility requirements for practice as a limited liability partnership that are imposed under the Act that regulates the eligible profession; and

             (f)  the fee the minister may set.

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Professional partnership

      56. A professional partnership is not eligible to register as a limited liability partnership unless

             (a)  members of that profession are expressly authorized by or under the Act by which that profession is governed to carry on the practice of the profession through a limited liability partnership; and

             (b)  prerequisites to that authorization that have been established under that Act have been met by the partnership.

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Certificate of registration

      57. (1) Where an application submitted to the registrar under section 55 is in accordance with the requirements of this Part, the registrar shall file the application and publish a notice of registration in the Gazette .

             (2)  On the filing of the application under subsection (1), the partnership is registered as a limited liability partnership.

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Change of partners

      58. The registration of a limited liability partnership is not adversely affected by a change in the partners in the partnership.

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Registration does not dissolve partnership

      59. Subject to an agreement among the partners, the registration of a partnership as a limited liability partnership does not cause the dissolution of the partnership, and the limited liability partnership continues as the same partnership that existed before the conversion.

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Legal elements in name

      60. A limited liability partnership shall have the words "Limited Liability Partnership" or the abbreviation "LLP" as part of and at the end of its name.

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Notice to clients

      61. On registration as a limited liability partnership, the partnership shall immediately send to all of its existing clients a notice that advises of the registration and explains in general terms the potential changes in liability of the partners that result from the registration and the operation of this Part.

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Registered office

      62. (1) A limited liability partnership shall at all times have a registered office in the province.

             (2)  A limited liability partnership may designate a separate post office box within the province as its address for service by mail.

             (3)  A limited liability partnership's registered office shall be the business premises of the partnership or of a person or firm that has agreed to act as the limited liability partnership's registered office, and the partnership shall ensure that its registered office is

             (a)  accessible to the public during normal business hours; and

             (b)  readily identifiable from the information provided in the application for registration or in a notice amending the application.

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List of partners

      63. A limited liability partnership shall keep at its registered office a list of its partners and shall, without delay, provide the following information without charge to a person who requests it:

             (a)  a list of the partners; and

             (b)  a list of the persons who were partners in the limited liability partnership on a date specified in the request.

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Annual return

      64. (1) A limited liability partnership shall annually, within 2 months after each anniversary of the date on which the partnership was registered as a limited liability partnership, file with the registrar an annual return in the form the registrar may require.

             (2)  A limited liability partnership that has not filed with the registrar one or more annual returns under this Act shall remedy that default before filing with the registrar another annual return under this Act.

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Notice of change

      65. (1) Where information included in an application under paragraph 55 (3)(a), (c) or (d) or this section changes, the limited liability partnership shall promptly file a notice of change to the application, in the form the registrar may require, indicating the change.

             (2)  The registrar shall issue an amended certificate of registration on filing of a notice of change to the name of the limited liability partnership under subsection (1) and shall publish notice of the change in the Gazette .

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Non-registered status

      66. A partnership that has the status of a limited liability partnership under the laws of a jurisdiction outside the province shall be treated as an ordinary partnership with respect to rights and obligations that it acquires or incurs under this province's laws while carrying on business in the province without being registered as an extra-provincial limited liability partnership.

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Application to register as extra-provincial limited liability partnership

      67. (1) A partnership consisting of partners who practice in an eligible profession that has the status of, or a status equivalent to, a limited liability partnership under the laws of a jurisdiction outside the province may apply to register as an extraprovincial limited liability partnership.

             (2)  An application referred to in subsection (1) shall include

             (a)  information to identify the governing jurisdiction of the partnership, and confirm that the partnership has the status of a limited liability partnership in its governing jurisdiction;

             (b)  the name of the partnership;

             (c)  a description of the eligible profession in which the partners practise;

             (d)  the name and residential address in the province of the partner who is designated as the representative of the partnership with respect to matters relating to the partnership;

             (e)  the address of the registered office of the partnership in the province;

             (f)  a statement from a person who is authorized by the governing body of the applicable eligible profession to provide the statement certifying that the partnership and the partners meet all applicable eligibility requirements for practice as a limited liability partnership that are imposed under the Act that regulates the eligible profession; and

             (g)  the fee the minister may set.

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Professional partnership

      68. A professional partnership that has the status of a limited liability partnership under the laws of a jurisdiction outside the province shall not register as an extra-provincial limited liability partnership unless

             (a)  members of that profession are expressly authorized by or under the Act by which that profession is governed in this province to carry on the practice of the profession through a limited liability partnership; and

             (b)  prerequisites to that authorization that have been established under that Act have been met by the partnership.

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Certificate of registration

      69. (1) Where an application submitted to the registrar under section 67 is in accordance with the requirements of this Part, the registrar shall file the certificate, issue to the partnership a certificate of registration and publish notice of registration in the Gazette .

             (2)  On issuance of the certificate of registration under subsection (1), the partnership is registered as an extra-provincial limited liability partnership.

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Change in partners

      70. The registration of an extra-provincial limited liability partnership is not adversely affected by a change in the partners in the partnership.

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Legal elements in name

      71. (1) The name of an extra-provincial limited liability partnership

shall

             (a)  contain the words and abbreviations required under the law of its governing jurisdiction; and

             (b)  comply with section 60 .

             (2)  In the event of a conflict between the requirement under paragraph (1)(a) and the requirement under paragraph (1)(b), the requirement under paragraph (1)(b) prevails.

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Notice to clients

      72. On registration as an extra-provincial limited liability partnership, the partnership shall immediately send to all of its existing clients in this province a notice that advises of the registration and explains in general terms the potential changes in liability of the partners that result from the registration and the operation of this Part.

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Registered office

      73. (1) An extra-provincial limited liability partnership shall at all times have a registered office in the province.

             (2)  An extra-provincial limited liability partnership may designate a separate post office box within the province as its address for service by mail.

             (3)  A limited liability partnership's registered office shall be the business premises of the partnership or of a person or firm that has agreed to act as the limited liability partnership's registered office, and the partnership shall ensure that its registered office is

             (a)  accessible to the public during normal business hours; and

             (b)  readily identifiable from the information provided in the application for registration or in a notice amending the application.

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List of partners

      74. An extra-provincial limited liability partnership shall keep at its registered office a list of the partners resident in this province and shall, without delay, provide the following information without charge to a person who requests it:

             (a)  a list of the partners resident in this province ; and

             (b)  a list of the persons who were partners resident in this province in the partnership on a date specified in the request, which shall be after it was registered under this Part.

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Annual return

      75. (1) An extra-provincial limited liability partnership shall annually, within 2 months after each anniversary of the date on which the partnership was registered as an extra-provincial limited liability partnership, file with the registrar an annual return in the form the registrar may require.

             (2)  An extra-provincial limited liability partnership that has not filed with the registrar one or more annual returns under this Act shall remedy that default before filing with the registrar other annual returns under this Act.

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Notice of change

      76. (1) Where information included in an application under paragraph 67 (2)(b), (d) or (e) or this section changes, the extra-provincial limited liability partnership shall promptly file a notice of change to the application, in the form the registrar may require, indicating the change.

             (2)  The registrar shall issue an amended certificate of registration on filing of a notice of change to the name of the extra-provincial limited liability partnership under subsection (1) and shall publish notice of the change in the Gazette .

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Law of governing jurisdiction

      77. (1) Except as provided in another Act, the law of the governing jurisdiction of an extra-provincial limited liability partnership applies

             (a)  to the organization and internal affairs of the extra-provincial limited liability partnership; and

             (b)  to the liability of the extra-provincial limited partnership and its partners for debts, obligations and liabilities of or chargeable to the extra-provincial limited liability partnership or its partners.

             (2)  Notwithstanding subsection (1), a provincial partner of an extraprovincial limited liability partnership does not have greater protection against individual liability for partnership obligations with respect to his or her activities in the province than a partner in a limited liability partnership has under this Part.

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Restrictions on name

      78. (1) The name of a limited liability partnership or an extraprovincial limited liability partnership shall not be

             (a)  identical to the name of another limited liability partnership or another extra-provincial limited liability partnership; or

             (b)  so similar to the name of another limited liability partnership or another extra-provincial limited liability partnership that the only difference is with respect to the phrase or abbreviation required to be included under section 60 .

             (2)  Paragraph (1)(b) does not apply if the written consent of the other limited liability partnership is filed with the registrar.

             (3)  Where a limited liability partnership or an extra-provincial limited liability partnership is registered with a name that does not comply with this Part, the registrar may, by notice in writing to the partnership, direct the partnership to change its name to one that complies with this Part within 60 days after the date of the notice.

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Notice of dissolution

      79. (1) On the dissolution of a limited liability partnership or an extra-provincial limited liability partnership, the partnership shall submit to the registrar for filing a notice, in the form the registrar may require, advising the registrar of the dissolution of the partnership.

             (2)  For the purpose of subsection (1), a person who was a partner of the partnership at the time of its dissolution may file the required notice.

             (3)  Where a limited liability partnership or an extra-provincial limited liability partnership files a notice of dissolution under subsection (1), the registrar shall cancel the registration of the partnership and shall publish notice of cancellation in the Gazette .

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Application of law of governing jurisdiction

      80. Notwithstanding the dissolution of an extra-provincial limited liability partnership, section 77 as it relates to the liability of the partnership and the partners continues to apply to the partnership and its partners until the business and affairs of the partnership are wound up.

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Cancellation of registration

      81. (1) The registrar may cancel the registration of

             (a)  a limited liability partnership where

                      (i)  the limited liability partnership fails to file an annual return required under section 64 , or

                     (ii)  there is filed with the registrar a request, in the form the registrar may require, that the registration be cancelled; or

             (b)  an extra-provincial limited liability partnership where

                      (i)  the extra-provincial limited liability partnership fails to file an annual return required under section 75 , or

                     (ii)  there is filed with the registrar a request, in the form the registrar may require, that the registration be cancelled.

             (2)  Before the registrar cancels the registration under subsection (1), the registrar shall provide to the partnership, a notice informing it of the intended cancellation.

             (3)  At any time later than one month after the date of the notice, the registrar may cancel the registration of the partnership, unless the default is remedied or the registrar is satisfied that reasonable steps are being taken to remedy the default and the registrar shall publish notice of cancellation in the Gazette .

             (4)  Cancellation of the registration of a limited liability partnership or an extra-provincial limited liability partnership does not dissolve the partnership, but instead only removes its status as a limited liability partnership.

             (5)  On the cancellation of the registration of a partnership as a limited liability partnership or an extra-provincial limited liability partnership,

             (a)  where the partnership has the province as its governing jurisdiction, this Act applies to the partnership as if it were an ordinary partnership and section 48 ceases to apply to the partnership and its partners, and

             (b)  where the partnership does not have the province as its governing jurisdiction, this Act applies to the partnership as if it were a partnership that does not have this province as its governing jurisdiction and that is not an extra-provincial limited liability partnership and paragraph 77 (1)(b) ceases to apply to the partnership and its partners.

             (6)  Cancellation of the registration of a partnership as a limited liability partnership or an extra-provincial limited liability partnership does not affect the liability of a partner in the partnership in respect of a partnership obligation that

             (a)  arose before the cancellation of the registration of the partnership as a limited liability partnership, or

             (b)  arose out of a contract entered into before the cancellation of the registration of a partnership as a limited liability partnership.

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Service

      82. (1) A notice or document required or permitted to be sent to or served on a limited liability partnership may be

             (a)  delivered to the limited liability partnership's registered office as shown in the registrar's records;

             (b)  personally served on the partner who is designated as the representative of the limited liability partnership as shown in the registrar's records; or

             (c)  sent by registered mail to

                      (i)  the limited liability partnership's registered office as shown in the registrar's records,

                     (ii)  the partner who is designated as the representative of the partnership as shown in the registrar's records, or

                    (iii)  the separate post office box designated as its address for service by mail as shown in the registrar's records.

             (2)  A notice or document sent by registered mail to a limited liability partnership in accordance with paragraph (1)(c) is considered to be received or served on the day the intended recipient actually receives it.

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