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Partnership Agreement Template

A partnership agreement sets out the rights, obligations, and profit-sharing arrangements between two or more people carrying on business together in Canada. Use our free template to override the default rules in provincial Partnership Acts and avoid disputes over contributions, decision-making, and dissolution.

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PARTNERSHIP AGREEMENT
General Partnership · Ontario, Canada
PARTNER 1
Sarah J. Mitchell
123 Bay Street, Suite 400, Toronto, ON M5J 2T3
Managing Partner
PARTNER 2
David R. Nguyen
88 Front Street West, Toronto, ON M5J 0E2
Senior Partner
PARTNER 3
Priya Patel
500 King Street West, Toronto, ON M5V 1L9
Partner
PARTNER 4
Marc Tremblay
20 York Street, Toronto, ON M5J 0A1
Junior Partner
Maple and Cedar Advisory
Effective: April 1, 2026 · Shares: 40% / 30% / 20% / 10%
This Partnership Agreement (this "Agreement") is made as of April 1, 2026 by and between Sarah J. Mitchell, David R. Nguyen, Priya Patel, and Marc Tremblay (each a "Partner" and collectively the "Partners"). The Partners agree to carry on business together in a general partnership under the name Maple and Cedar Advisory (the "Partnership") on the terms set out below. This Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, including the Partnerships Act (Ontario), R.S.O. 1990, c. P.5.
1.
FORMATION, NAME AND NATURE OF THE PARTNERSHIP
The Partners hereby associate themselves as a general partnership under the name Maple and Cedar Advisory, with its principal place of business at 350 Bay Street, Suite 1200, Toronto, ON M5H 2S6, or such other place as the Partners may agree in writing. The business of the Partnership is: To carry on the business of management consulting, financial advisory and related professional services to small and medium-sized enterprises across Ontario.. A general partnership is not a legal entity separate and distinct from its Partners. Each Partner is personally liable — jointly, and to the extent provided by the applicable legislation severally — with the other Partners for the debts, obligations and wrongful acts of the Partnership incurred in the ordinary course of its business. There is no limited-liability shield: a creditor of the Partnership may recover the full amount of a Partnership debt from any one Partner. Nothing in this Agreement constitutes any Partner the agent of another for any purpose outside the ordinary course of the Partnership business.
2.
TERM AND COMMENCEMENT
The Partnership commences on April 1, 2026 and continues for an indefinite term until dissolved in accordance with this Agreement or as required by the applicable provincial partnership legislation.
3.
CAPITAL CONTRIBUTIONS
Each Partner shall contribute to the capital of the Partnership as set out in the table below. A separate capital account shall be maintained for each Partner. No Partner may withdraw any part of their capital contribution, and no further capital may be called for, except by the unanimous written agreement of all Partners. A Partner who fails to make a duly resolved additional contribution shall be liable to the Partnership for the shortfall.
Sarah J. Mitchell (40% profit share)200,000.00 CAD — cash, property or services as agreed
David R. Nguyen (30% profit share)150,000.00 CAD — cash, property or services as agreed
Priya Patel (20% profit share)100,000.00 CAD — cash, property or services as agreed
Marc Tremblay (10% profit share)50,000.00 CAD — cash, property or services as agreed
4.
PROFIT AND LOSS ALLOCATION
The net profits and net losses of the Partnership shall be allocated among the Partners in the following proportions: Sarah J. Mitchell: 40%; David R. Nguyen: 30%; Priya Patel: 20%; Marc Tremblay: 10%. This express allocation displaces the statutory default of equal sharing that would otherwise apply under the Partnerships Act (Ontario), R.S.O. 1990, c. P.5. Profits shall be determined from the annual financial statements of the Partnership, whose fiscal year ends on December 31. Each Partner may take monthly drawings not exceeding 8,000.00 CAD, in every case subject to the Partnership retaining sufficient working capital to meet its obligations as they fall due. Drawings are advances against profit share and are reconciled at each fiscal year end. The Partners are not employees of the Partnership and their drawings do not constitute employment remuneration.
5.
MANAGEMENT AND DECISION-MAKING
Subject to this Agreement, each Partner is entitled and obliged to take part in the management of the Partnership business and has authority to bind the Partnership in transactions within the ordinary course of business. No single Partner may, without the prior written consent of all Partners, commit the Partnership to any single transaction exceeding 10,000.00 CAD, nor: (a) borrow money or grant security over Partnership assets; (b) give any guarantee or indemnity; (c) hire or dismiss employees outside the ordinary course; or (d) compromise or release any debt owed to the Partnership. Ordinary-course decisions are taken by simple majority of the Partners; fundamental changes — including admitting a new Partner, changing the nature of the business, or amending this Agreement — require the unanimous written consent of all Partners.
6.
BANKING AND FINANCIAL RECORDS
The Partnership shall maintain one or more dedicated accounts at Royal Bank of Canada (RBC) in the name of the Partnership. All Partnership receipts shall be deposited into, and all disbursements made from, such accounts, and Partnership funds shall not be commingled with the personal funds of any Partner. Cheques, electronic transfers and other payment instructions require the authorization of any two Partners acting jointly. The Partnership shall keep proper books of account, open to inspection by any Partner at any reasonable time, and its annual financial statements shall be the subject of a review engagement performed under CSRE 2400 by a Chartered Professional Accountant (CPA) within one hundred and twenty (120) days of each fiscal year end (December 31) and provided to every Partner.
7.
LOANS BY PARTNERS TO THE PARTNERSHIP
Any Partner may, with the prior written agreement of the other Partners, advance a loan to the Partnership. Such a loan is separate from that Partner’s capital account and ranks as a creditor claim against the Partnership ahead of any return of capital. Interest, if agreed, shall be charged at a commercially reasonable rate that in no event reaches a criminal rate of interest within the meaning of section 347 of the Criminal Code (Canada), and the rate shall be expressed as an annual rate as required by the Interest Act (Canada), R.S.C. 1985, c. I-15. In the absence of a written repayment schedule, a partner loan is repayable on ninety (90) days’ written notice.
8.
FIDUCIARY DUTIES AND GOOD FAITH
Each Partner owes the other Partners and the Partnership the fiduciary duties recognized at common law and codified in the applicable provincial partnership legislation, including: (a) the duty of utmost good faith; (b) the duty to render true accounts and full information on all matters affecting the Partnership; (c) the duty to account to the Partnership for any private benefit or profit derived, without consent, from any transaction concerning the Partnership or from any use of Partnership property, name or business connection; and (d) the duty not to carry on, without the consent of the other Partners, any business of the same nature as and competing with the Partnership, failing which that Partner must account for and pay over all profits made in that competing business. These duties survive dissolution in respect of pre-dissolution conduct.
9.
TAXATION AND CRA FILINGS
The Partnership is not a separate taxpayer under the Income Tax Act (Canada), R.S.C. 1985, c. 1 (5th Supp.). Partnership income and losses are computed at the Partnership level and then allocated to, and reported by, each Partner in their own tax return in the proportions set out in this Agreement. The Partners designate Sarah J. Mitchell as the Partner authorized to prepare and file the Partnership’s T5013 Partnership Information Return with the Canada Revenue Agency where required, and to issue a T5013 slip to each Partner. The Partnership is registered for GST/HST and shall collect, remit and report GST/HST as a single registrant on its supplies. The Partners shall keep books and records for the periods required by the Income Tax Act and the Excise Tax Act (Canada).
10.
ADMISSION OF NEW PARTNERS
No person may be admitted as a Partner except with the unanimous written consent of all existing Partners. A new Partner must sign an accession agreement agreeing to be bound by this Agreement, contribute such capital as the Partners agree, and be allocated a profit share documented in a written amendment signed by all Partners. The admission of a new Partner does not of itself dissolve the Partnership.
11.
TRANSFER OF PARTNERSHIP INTEREST
No Partner may sell, assign, pledge or otherwise dispose of all or any part of their interest in the Partnership without the prior written consent of all other Partners. A Partner wishing to dispose of their interest shall first offer it to the remaining Partners, pro rata to their existing profit shares, at the value determined under the clause headed "Valuation on Exit" (a right of first refusal). If the remaining Partners do not take up the interest within thirty (30) days, it may be offered to a third party only on the same terms and only with the written consent of all remaining Partners. Any purported transfer in breach of this clause is void.
12.
RETIREMENT AND WITHDRAWAL
A Partner may retire from the Partnership on giving not less than ninety (90) days’ written notice to the other Partners. On retirement: (a) the remaining Partners may elect to continue the Partnership business and purchase the retiring Partner’s interest at the value determined under the clause headed "Valuation on Exit"; (b) the purchase price may be paid in equal instalments over a period not exceeding twenty-four (24) months from the date of valuation; and (c) the retiring Partner remains liable for Partnership obligations incurred before the effective date of retirement, but is released from obligations incurred afterwards once notice of the retirement has been given to the Partnership’s known creditors and (where applicable) the business-names registry has been updated.
13.
VALUATION ON EXIT
The value of a Partner’s interest payable on retirement, withdrawal, expulsion or death shall be the fair market value of that interest as determined by an independent Chartered Professional Accountant (CPA) jointly appointed by the Partners (or, failing agreement within fifteen (15) days, appointed on the application of any Partner by the provincial CPA body). The valuation shall account for the Partner’s capital account balance, their proportionate share of undistributed profits and goodwill, and any liabilities. A determination of value by the appointed accountant, acting as an expert and not as an arbitrator, is final and binding on the Partners absent manifest error.
14.
DISSOLUTION AND WINDING UP
The Partnership shall be dissolved on the death, mental incapacity, or bankruptcy/insolvency of any Partner; or not less than ninety (90) days’ written notice of withdrawal by any Partner; or the unanimous written agreement of all Partners; or the expiry of the term of the Partnership; or any event making it unlawful for the business of the Partnership to be carried on. On dissolution the Partners shall wind up the affairs of the Partnership and apply its assets in the following order: (a) in paying the debts and liabilities of the Partnership owing to creditors who are not Partners; (b) in repaying to the Partners any loans or advances (other than capital); (c) in repaying to the Partners their capital contributions; and (d) in distributing any surplus to the Partners in their profit-sharing proportions. Where a Partner is insolvent, the priorities in the Bankruptcy and Insolvency Act (Canada), R.S.C. 1985, c. B-3 apply. No Partner may dissolve the Partnership otherwise than in good faith.
15.
RESERVED MATTERS
Notwithstanding the ordinary-course spending authority in the clause headed "Management and Decision-Making", none of the following matters ("Reserved Matters") may be undertaken without the prior unanimous written consent of all Partners: (a) any borrowing, finance lease or grant of security in a single transaction exceeding 50,000.00 CAD; (b) the giving of any guarantee, indemnity or suretyship in favour of a third party; (c) the sale, transfer or disposal of all or substantially all of the Partnership’s assets; (d) any capital expenditure or commitment in a single transaction exceeding 25,000.00 CAD; (e) the appointment, dismissal or material change to the terms of any senior employee or manager; (f) Sale of all or substantially all partnership assets; (g) Granting of any guarantee or indemnity to a third party; (h) Admission or expulsion of a Partner. Any act purporting to bind the Partnership in breach of this clause is unauthorized, and the acting Partner shall indemnify the Partnership against all resulting loss.
16.
INTELLECTUAL PROPERTY
All intellectual property created, developed or acquired in the course of the Partnership business — including copyrights, industrial designs, trade-marks, know-how, methodologies, software, databases, client lists and goodwill — is the property of the Partnership. Each Partner assigns to the Partnership, on a continuing basis, all right, title and interest (including, to the extent permitted by the Copyright Act (Canada), a waiver of moral rights) in any such intellectual property created by that Partner in the course of the Partnership business. On dissolution, the Partnership’s intellectual property shall be dealt with as part of the winding-up of assets.
17.
EXCLUSIVITY DURING THE PARTNERSHIP
During the term of this Agreement each Partner shall devote their full working time and skill to the Partnership business and shall not, without the prior written consent of the other Partners, engage in any business that competes with the Partnership or that would materially impair the performance of that Partner’s duties. Passive investments of less than five percent (5%) in publicly traded companies, and positions held in a personal or family capacity, are permitted. This clause is in addition to the fiduciary duties set out above.
18.
CONFIDENTIALITY AND PRIVACY
Each Partner shall keep confidential the terms of this Agreement and all non-public commercial, financial, technical and client information of the Partnership, both during the term and for three (3) years after ceasing to be a Partner. Where Partnership information includes personal information, the Partners shall handle it in accordance with the Personal Information Protection and Electronic Documents Act (PIPEDA), S.C. 2000, c. 5 (or the applicable substantially-similar provincial privacy legislation). A Partner may disclose confidential information to their professional advisors on equivalent terms, or where required by law.
19.
RESTRICTIVE COVENANTS
Each Partner covenants that they will: (a) for a period of twenty-four (24) months after ceasing to be a Partner, not carry on or be engaged in any business that competes with the Partnership’s business as carried on at the date of departure, within the Province or Territory in which the Partnership carried on business as at the date of departure; (b) for a period of twenty-four (24) months after ceasing to be a Partner, not solicit or entice away any client, customer, employee or contractor of the Partnership with whom that Partner had material dealings in the twelve (12) months before departure. These covenants are given in connection with the Partnership and the protection of its goodwill, confidential information and client relationships, and not in the context of employment — they are therefore not caught by the prohibition on employee non-competition agreements in the Employment Standards Act, 2000 (Ontario), s. 67.2 (and equivalent measures elsewhere). The Partners agree that the restrictions are reasonable in scope, duration and territory as between themselves, consistent with Elsley v. J.G. Collins Insurance Agencies Ltd., [1978] 2 S.C.R. 916 and Dr. C. Sims Dentistry Professional Corp. v. Cooke, 2024 ONCA 388. If any restriction is found to be unreasonable, it shall be read down to the extent necessary to make it enforceable rather than struck out entirely.
20.
DISPUTE RESOLUTION AND DEADLOCK
The Partners shall use good-faith efforts to resolve any dispute by negotiation. If the Partners reach a deadlock on a material decision or a Reserved Matter, the deadlock shall be resolved by a shotgun buy-sell: the Partner declaring the deadlock shall, by written notice, offer either to buy the interests of the other Partner(s) or to sell their own interest, in each case at a stated price per one percent (1%) of profit share; the recipient(s) shall, within thirty (30) days, elect either to sell at that price or to buy at that price, and failure to elect within that period is deemed an election to sell. Any dispute arising out of or in connection with this Agreement that is not so resolved shall be finally determined by arbitration before a single arbitrator administered by the ADR Institute of Canada (ADRIC) under its Arbitration Rules, seated at Toronto, Ontario and governed by the applicable provincial Arbitration Act. The award is final and binding. Nothing prevents a Partner from applying to court for urgent injunctive relief.
21.
EXPULSION OF A PARTNER
A Partner may be expelled by unanimous written resolution of the other Partners (a power conferred by express agreement as required by the applicable provincial partnership legislation) if that Partner: (a) commits a material breach of this Agreement that, if capable of remedy, is not remedied within thirty (30) days of written notice; (b) commits any act of fraud, theft or dishonesty against the Partnership or another Partner; (c) becomes bankrupt or makes an assignment or proposal under the Bankruptcy and Insolvency Act (Canada); (d) loses any professional licence or registration essential to the Partnership business; (e) becomes permanently unable, through incapacity, to perform their duties for a continuous period exceeding six (6) months; (f) Conduct bringing the Partnership into disrepute; (g) Repeated failure to participate in the management of the Partnership without reasonable cause. On expulsion, the expelled Partner is entitled to the value of their interest determined under the clause headed "Valuation on Exit" and remains liable for Partnership obligations incurred before the expulsion date as if they had retired.
22.
KEY-PERSON INSURANCE
The Partnership shall, within ninety (90) days of the date of this Agreement, take out and maintain key-person life and disability insurance on each Partner of not less than 1,000,000.00 CAD per Partner. The Partnership shall be the owner and beneficiary of each policy, and the premiums are a Partnership expense. The proceeds shall be applied first to fund the buy-out of the affected Partner (or, on death, that Partner’s estate) under the clause headed "Valuation on Exit". Each Partner shall co-operate with the insurer’s underwriting requirements.
23.
GOVERNING LAW AND JURISDICTION
This Agreement is governed by, and shall be construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein, including the Partnerships Act (Ontario), R.S.O. 1990, c. P.5. Subject to the arbitration provisions of this Agreement, the courts of the Province of Ontario have non-exclusive jurisdiction over any matter not subject to arbitration.
24.
ELECTRONIC EXECUTION AND COUNTERPARTS
This Agreement may be executed in counterparts, including electronic counterparts and electronic signatures, each of which is an original and which together constitute one agreement. Electronic signatures and electronic copies are valid and enforceable under the applicable provincial electronic-commerce legislation (modelled on the Uniform Electronic Commerce Act), such as the Electronic Commerce Act, 2000 (Ontario), S.O. 2000, c. 17.
25.
GENERAL PROVISIONS
Entire Agreement: This Agreement is the entire agreement between the Partners on its subject matter and supersedes all prior discussions and agreements.
Amendment: No amendment is effective unless in writing and signed by all Partners.
Severability: If any provision is held invalid or unenforceable, it shall be severed and the remaining provisions continue in full force.
Waiver: No failure or delay in exercising a right is a waiver of it.
Notices: All notices shall be in writing and delivered personally, by registered mail or by email to the addresses recorded above.
Time: Time is of the essence of this Agreement.
Costs: Each Partner bears their own costs of negotiating this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.
PARTNER 1
Sarah J. Mitchell
Managing Partner
Date: ____________________
PARTNER 2
David R. Nguyen
Senior Partner
Date: ____________________
PARTNER 3
Priya Patel
Partner
Date: ____________________
PARTNER 4
Marc Tremblay
Junior Partner
Date: ____________________

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What Is a Partnership Agreement?

A partnership agreement is a written contract among partners that governs how their business will operate, how profits and losses will be shared, how decisions will be made, and how the partnership will be dissolved. Unlike a corporation, a general partnership has no separate legal personality — the partners are the business, and each is jointly and severally liable for partnership obligations. A written agreement allows partners to customize the relationship and displace statutory defaults that might otherwise apply.

In Canada, partnerships are governed provincially. Ontario’s Partnerships Act, R.S.O. 1990, c. P.5, defines a partnership in section 2 as "the relation that subsists between persons carrying on a business in common with a view to profit." Section 8 makes every partner jointly and severally liable for the wrongful acts and omissions of co-partners acting in the ordinary course of business. British Columbia applies similar rules under the Partnership Act, R.S.B.C. 1996, c. 348.

Without a written agreement, default rules apply: equal profit sharing regardless of contribution, no entitlement to salary, unanimous consent for new partners, and dissolution on the death or retirement of any partner. These defaults rarely match what the partners actually want. A properly drafted partnership agreement replaces them with terms that reflect each partner’s capital contribution, role, and expectations.

What's Covered in This Template

Our partnership agreement is drafted to displace the default statutory rules with terms tailored to your business.

Partnership Name and Business

Registered partnership name and a description of the business to be carried on.

Partner Details and Contributions

Names, addresses, and capital contributions of each partner in cash, property, or services.

Profit and Loss Sharing

Percentages or formulas for allocating profits and losses, overriding equal-sharing defaults.

Management and Decision-Making

Voting rights, quorum requirements, and reserved matters requiring unanimous consent.

Partner Duties and Restrictions

Expected time commitment, fiduciary duties, and non-compete obligations during the partnership.

Drawings and Salaries

Entitlement of partners to regular drawings, salary, or interest on capital.

Admission and Withdrawal of Partners

Process for admitting new partners, voluntary withdrawal, and forced exit.

Dispute Resolution

Escalation, mediation, and arbitration clauses for partner disputes.

Dissolution and Winding Up

Triggering events for dissolution and allocation of assets on winding up.

Governing Law

Selection of the applicable Canadian province and registration obligations.

How to Create a Partnership Agreement

Follow these steps to produce a partnership agreement that reflects the partners’ intentions.

  1. 1

    Agree on Business and Contributions

    Document the nature of the business and what each partner is contributing in capital, property, or labour.

  2. 2

    Set Profit-Sharing and Drawings

    Decide how profits and losses will be allocated and whether partners will take drawings, salaries, or both.

  3. 3

    Define Management and Authority

    Clarify who makes which decisions, what requires a vote, and what requires unanimous consent.

  4. 4

    Plan for Change and Exit

    Address how new partners are admitted, how existing partners exit, and how the partnership can be dissolved.

  5. 5

    Register and Sign

    Register the business name under the Business Names Act, R.S.O. 1990, c. B.17, or equivalent provincial law, and sign the agreement.

Why Doxuno documents are different

Four things that make our templates more thorough than AI-generated drafts and more current than static template libraries.

Accurate

Country-specific legal content

Drafted with legal expertise for each jurisdiction, far more thorough than AI-generated drafts that copy generic clauses across borders.

Always current

Always current with the law

Templates carrying statute references are continuously updated as the law changes. Your document always reflects the current legal framework.

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Print-ready PDF

Free to download. Vector text, embedded fonts, statute citations baked in. Print, sign, file. Ready for any signing flow including electronic signature.

Word · .docx

Editable Word (.docx)

Continue editing in Word after download. Add custom clauses, reuse the template for similar agreements, or share with a colleague for collaborative review.

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Legal Considerations

Canadian partnership law is provincial, and several statutes interact with the agreement.

This template is for informational purposes only and does not constitute legal advice. Consult a qualified lawyer in your province for advice specific to your situation.

Reviewed for Canadian law

Provincial Partnership Acts

Ontario’s Partnerships Act, R.S.O. 1990, c. P.5, section 2, defines a partnership, and section 8 imposes joint and several liability on partners for wrongful acts in the ordinary course of business. British Columbia’s Partnership Act, R.S.B.C. 1996, c. 348, and similar statutes in Alberta and other provinces provide parallel default rules. A written agreement is essential because these defaults apply automatically where the partners have not agreed otherwise.

Limited Partnerships and LLPs

If partners want limited liability, they must form a limited partnership under the Limited Partnerships Act, R.S.O. 1990, c. L.16 (or provincial equivalent), with at least one general partner and limited partners whose liability is capped at their contribution. Limited liability partnerships (LLPs) are available in most provinces for professional services firms and provide limited liability shielding partners from the negligence of co-partners.

Business Name Registration

Under the Business Names Act, R.S.O. 1990, c. B.17, a partnership carrying on business under a name other than the partners’ names must register that name. Failure to register can prevent the partnership from maintaining legal proceedings in Ontario. Equivalent registration rules apply in other provinces.

Tax Treatment and Fiduciary Duties

A Canadian partnership is not a separate taxpayer under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.). Each partner reports their share of partnership income on their personal or corporate return. Partners also owe each other fiduciary duties of good faith, full disclosure, and accounting, recognised at common law and reinforced in Canadian partnership case law across every province.

Frequently Asked Questions

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