Limited Liability Partnership (LLP) in Ontario

An LLP is a general partnership with a statutory liability shield. Under section 44.1 of Ontario's Partnerships Act, it is formed when two or more persons enter into a written agreement that designates the partnership as a limited liability partnership and states that the Act governs the agreement. An existing partnership can be continued as an LLP if all of the partners sign a new agreement, or amend their existing one, in the same way.

An LLP is not a corporation. It has no shares, directors or articles; the partners run the firm under their partnership agreement, and the Partnerships Act's default rules fill the gaps. For income tax purposes it is treated like any other partnership: income is calculated at the partnership level and allocated to the partners, who report it on their own returns.

The rules are short. Section 10 sets out the liability shield and sections 44.1 to 44.4 cover formation, permitted use, the firm name and LLPs formed elsewhere. The consolidated text is on Ontario e-Laws.

Ontario reserves LLPs for regulated professions. Under section 44.2, an LLP may carry on business in Ontario only to practise a profession governed by an Act, and only if:

1. that Act expressly permits an LLP to practise the profession;
2. the profession's governing body requires the partnership to maintain a minimum amount of liability insurance; and
3. the partnership registers its firm name under the Business Names Act (section 44.3, or section 44.4 for an LLP formed outside Ontario).

As of October 2026, the statutes that expressly permit LLPs include:

• Law. Section 61.1 of the Law Society Act lets lawyers, licensed paralegals, a combination of the two, or professional corporations form an LLP, subject to the Law Society's by-laws.
• Accounting. Section 27 of the Chartered Professional Accountants of Ontario Act, 2017 lets CPA Ontario members, professional corporations or both form an LLP.
• Human resources. Section 25 of the Registered Human Resources Professionals Act, 2013 lets members of the association form an LLP to practise in the field of human resources.

Many professions have no such provision. The Ontario statutes governing engineers and architects, for example, do not mention LLPs, so those professionals cannot practise through an Ontario LLP. An ordinary business, such as a retailer, a software company or an unregulated consultancy, cannot use an LLP at all.

The firm name must end with "limited liability partnership", "LLP" or "L.L.P.", or the French equivalents "société à responsabilité limitée" or "s.r.l.", and the firm may carry on business only under its registered name (section 44.3).

Under subsection 10(2), a partner in an LLP is not liable, by indemnification, contribution or otherwise, for:

• debts, liabilities or obligations arising from the negligent or wrongful acts or omissions of another partner, or of an employee, agent or representative of the partnership, in the course of the partnership business; or
• any other debts or obligations of the partnership incurred while it is an LLP.

The shield has firm limits. Under subsection 10(3), it does not protect a partner from liability for:

• the partner's own negligent or wrongful acts or omissions;
• those of a person under the partner's direct supervision; or
• those of another partner or employee not under the partner's direct supervision, if the conduct was criminal or fraudulent, or if the partner knew or ought to have known of it and did not take the steps a reasonable person would have taken to prevent it.

The firm's own property stays exposed: subsection 10(3.1) says the shield does not protect a partner's interest in partnership property from claims against the partnership. Debts the partnership incurred before it became an LLP remain the partners' responsibility (subsection 44.1(3)). And a partner who signs a personal guarantee of the office lease or bank line is bound by it as their own contract.

Professional liability insurance therefore remains the first line of protection. The shield decides whose personal assets are at risk once the insurance and the firm's assets are exhausted.

An LLP is easily confused with a limited partnership (LP) and is often used alongside a professional corporation (PC). They work differently.

An LP must have at least one general partner with unlimited liability, so it suits investment structures with passive investors rather than professional firms. A PC is a separate legal and taxable entity, but OBCA section 3.4 provides that practising through the corporation does not reduce a shareholder's liability for professional liability claims.

The structures are not mutually exclusive: in law and accounting, a professional corporation can itself be a partner in an LLP, and OBCA subsection 3.4(6) gives its shareholders the same liability for the LLP as if they were partners, shield and exceptions included. Our guide to setting up a professional corporation in Ontario covers that corporate layer.

Harpreet Gill, Sophie Tremblay and Kwame Asante are chartered professional accountants practising as a general partnership in Mississauga. In 2026 they amend their partnership agreement to designate the firm a limited liability partnership governed by the Partnerships Act, register the name Gill Tremblay Asante LLP under the Business Names Act, and confirm with CPA Ontario that the firm meets its registration and insurance requirements.

A year later, a client sues the firm for $600,000 over a tax filing that Kwame prepared and reviewed alone. The claim can be paid from the firm's insurance and assets, and from Kwame personally for his own negligence. Harpreet and Sophie did not supervise the file and had no reason to know of the problem, so subsection 10(2) protects their personal assets.

Two older obligations are treated differently. A $150,000 bank loan the firm took in 2024, before it became an LLP, remains the responsibility of all three partners under subsection 44.1(3). And Harpreet's personal guarantee of the office lease, signed in 2025, remains enforceable against her because it is her own contract. A conversion is a natural time to ask the bank and the landlord whether such personal obligations can be released or reduced.