Overview

Unlike other Canadian provinces, British Columbia allows the use of Llp’s for any business, not just for professional services such as law firms. An Llp offers some tax benefits, overall flexibility and protects all partners from personal liability.

The jurisdiction’s reputation is very strong as it is rarely associated with tax advantages. Political stability is good and there is a strong legal system historically derived from the British legal system. The legal system works with courts forming three levels of authority, the highest of which is the Supreme Court. There is good availability of legal services in BC.

There is a minimum of two partners needed, although there is no requirement for a General Partner, only Limited Partners. There is no limitation on the nationality or residence of partners.

Use Cases

BC LLPs may be used to manage investments including real estate and venture, this is particularly true where double-tax treaties apply with the owner’s country of tax residence. Also for managing estates for purposes of tax deferral with other countries.

Tax status

The partnership is not itself a taxable entity, instead tax falls due to the individual partners who pay tax on their proportion of the equity via their own tax returns. Business conducted away from Canada has no tax imposed on it for partners who are not resident in Canada. Revenue from business within Canada is treated differently.

Privacy

Privacy is good as the Partners are not publicly declared on a public register.

Onboarding

The formation of a partnership is fairly straightforward, a registered address is required. Your service provider will provide you with the templates for your statutory documents
KYC Verification Process There is no KYC requirement when incorporating a BC LLP, however when you engage a law firm to assist you they are obliged to conduct KYC in order that you are onboarded as their client

Entity Maintenance

Annual maintenance of the Llp is inexpensive and it has a very light administrative burden. Annual meetings may be held anywhere.

Renewal Periods.

Annual, within two months of the anniversary of the Llp’s formation

Reporting

There is a requirement to keep good records, but there are no audit requirements and financial records do not need to be filed within the required annual report. The report is required to verify the registered details are still accurate and to declare any changes to the information previously filed. An annual fee of CAD35 is payable to the registry, your service provider may also have annual fees for your registered address and other services.

Shutting down your entity

The best way to close your company will depend upon your situation, whether the company has debts and whether it is active. The cleanest way to go about this is to send a dissolution request to the registry along with some supporting documents. The company must be in good standing to do this, the fee is small and the directors’ liabilities are ended. Your service provider can help you with this process.

If the company is not in good standing and fails to file its annual return for two successive years, the registry can dissolve the company. This requires little input from the company owners but is a slower process not under your control, any assets are taken and directors’ liabilities may remain.