Insights Hub
Partnership Agreements & Disputes
How Ontario business partnerships are formed, what a partnership agreement should cover, and how disputes and exits are typically handled.
Going into business with a partner is, legally speaking, entering into an ongoing contractual relationship — one that Ontario's Partnerships Act will govern by default if the partners never put their own terms in writing.
This hub looks at what a partnership agreement should address, the disputes that most commonly arise between partners, and how a partnership can wind down in an orderly way when it's time to part ways.
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More guides in this hub
Partnership Disputes in Ontario: Common Problems and Practical Next Steps
Why partnership disputes happen, the most common flashpoints, and how they're usually resolved.
Ending a Business Partnership in Ontario: Exit Planning and Dissolution
How a partnership can wind down in an orderly way, and what to plan for before that day comes.
General vs. Limited Partnerships in Ontario
How a general partnership’s unlimited liability differs from a limited partnership’s capped exposure for limited partners, and when each structure fits.
Partnership vs. Corporation in Ontario: Choosing a Structure
How liability, taxation, formalities, and the ability to raise capital typically differ between a general partnership and a corporation in Ontario.
Buying Out a Business Partner in Ontario
How a departing partner’s interest is typically valued and paid out, and what happens when a partnership agreement never addressed a buyout.
Partnership Liability in Ontario: What Partners Are On the Hook For
How joint and several liability, a partner’s actions, and personal asset exposure work under Ontario’s Partnerships Act.
Adding or Removing a Partner in Ontario
Explains what an Ontario partnership agreement should say about admitting or expelling a partner, the default dissolution risk without a continuation clause, and why updating registrations and notifying creditors matters when a partner leaves.
Profit and Loss Sharing in an Ontario Partnership
Covers the Partnerships Act’s default equal-sharing rule, common alternative profit structures, drawings versus retained profit, and how losses mirror profit-sharing by default.
Fiduciary Duties Between Business Partners in Ontario
Explains the duties of good faith, disclosure, and accounting for secret profits that Ontario partners owe each other, the consequences of breaching them, and how this differs from an ordinary commercial relationship.
Partnership vs. Joint Venture in Ontario
Explains how Ontario courts look at substance over labels to distinguish an ongoing partnership from a project-specific joint venture, and how liability and governance typically differ between the two.
Silent Partners in Ontario: Rights and Risks
Covers how a silent/sleeping partner in a general partnership retains unlimited personal liability and information/profit rights despite staying out of management, unlike a properly formed limited partner.
Registering a Partnership Business Name in Ontario
Walks through the Business Names Act registration requirement for partnerships operating under non-personal names, clarifying that registration is disclosure (not trademark-style exclusivity) and needs periodic renewal.
Non-Compete Clauses in an Ontario Partnership Agreement
Carefully distinguishes partner-to-partner restrictive covenants (assessed under common-law reasonableness) from employee non-competes (banned under the ESA since October 2021), covering scope/duration/geography analysis and non-compete vs. non-solicit.
Decision-Making and Voting Rights in an Ontario Partnership
Explains the Partnerships Act default of majority rule for ordinary business vs. unanimous consent for fundamental changes, how agreements can customize equal vs. weighted voting, and deadlock-avoidance mechanisms.
Who Pays Partnership Debts After Dissolution in Ontario?
Explains that partnership debts are paid from partnership assets first during wind-up, how partners remain jointly and severally liable for any shortfall, and why notifying creditors of a partner’s exit limits liability for new debts.
Family Business Partnerships in Ontario: Common Pitfalls
Covers why family partnerships often skip a written agreement, common flashpoints like unequal contribution, succession expectations, mixed finances, and death or divorce, and why writing things down matters even more among family.
Mediating a Partnership Dispute in Ontario
Explains why mediation suits partnership disputes, how confidentiality and cost/speed compare to litigation, what a typical mediation process looks like, and what a successful outcome typically involves.
Converting a Partnership to a Corporation in Ontario
Covers why growing businesses convert to a corporation for limited liability and capital-raising, the general mechanics of incorporating, and winding up the old partnership.
Limited Liability Partnerships (LLPs) in Ontario
Clarifies that Ontario LLPs are restricted by the Partnerships Act to regulated professions like lawyers and accountants, explains the liability protection they give, and notes most businesses use a limited partnership or corporation instead.
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FAQ
Partnerships: frequently asked questions
Do we need a written partnership agreement if we already trust each other?
Trust doesn't prevent disagreements about scope, contribution, or exit terms down the road. A written agreement sets clear expectations before a dispute exists, when it's far easier to agree on fair terms.
What happens if partners never signed a written agreement?
Ontario's Partnerships Act supplies default rules — for example, profits and losses are generally shared equally regardless of each partner's contribution, unless the partners agreed otherwise.
Can one partner force the dissolution of a partnership?
It depends on the partnership agreement and the circumstances. Some agreements set out specific triggers and procedures for dissolution; without one, the default statutory rules and general legal principles apply.
What is a partner's fiduciary duty?
Partners generally owe each other duties of good faith and loyalty in the conduct of partnership business, which can affect how competing interests, opportunities and disclosures are expected to be handled.
Understand your agreement. Know your next step.
Ontario-wide, plain-English contract law information — built to help you make sense of your situation before you decide what to do next.