How do partnership businesses differ from other types of businesses or corporations?
A corporation has a separate and distinct legal existence from its shareholders. However, a partnership does not have this type of separate and distinct legal existence from its partners. A partnership is not treated or taxed as a separate person (as with a corporation). All income and losses are flowed out to the partners who report their share of the partnership’s income on their income tax return (whether it is a T1, T2, or T3 return). As a result, a partnership does not file an income tax return, and is not taxed at the partnership level. However, the CRA, through an administrative policy, requires certain partnerships to file the partnership information return (T5013). For more information on the current criteria for filing a partnership return, go to www.cra.gc.ca/partnership. 5. What changes are being made to the requirement to file a partnership information return? The CRA is replacing the requirement about the number of partners in a partnership with a requirement related to f
