Is each partner liable for the whole partnership's debts?

In a general partnership, yes. Each partner is jointly liable for the partnership's debts.

Sole Proprietorship vs Partnership in Ontario

Compare sole proprietorships and general partnerships in Ontario: ownership, liability, taxes, registration and when a partnership agreement matters.

structures4 min readPublished October 5, 2026

Side by side

	Sole proprietorship	General partnership
Owners	One	Two or more
Liability	Unlimited, personal	Unlimited, shared and joint
Tax	Owner's T1	Each partner's T1 on their share
Registration	Name in the OBR (if not your own name)	Name in the OBR (if not partners' names)

Get a partnership agreement

Without one, Ontario's Partnerships Act default rules apply, including equal profit sharing. An agreement should cover contributions, profit split, decision-making, and what happens when a partner leaves.

Consider incorporating

If liability is a concern, a corporation may be a better fit. See business structures compared and sole proprietorship in Ontario.

Frequently asked questions

Is each partner liable for the whole partnership's debts?: In a general partnership, yes. Each partner is jointly liable for the partnership's debts.

Official sources

Ontario Business Registry ↗— file and search Ontario registrations
Corporations Canada ↗— federal incorporation
Canada Revenue Agency — business ↗— BN, HST, payroll, T2

Sole Proprietorship vs Corporation in Ontario: Which Is Better? →

A comprehensive comparison of sole proprietorships vs corporations in Ontario: liability protection, corporate tax rates, setup costs, and reporting obligations.

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