(2) a relationship that subsists between persons carrying on business in common with a view to a profit (the Department's administrative definition of "partnership"). the Department's administrative definition of "joint venture") or (1) an arrangement in which two or more persons work together in a limited and defined business undertaking, which does not constitute a partnership, a trust or a corporation, the expenses and revenues of which will be distributed in mutually agreed portions (i.e. To determine whether a particular relationship is a joint venture or a partnership, the circumstances of the relationship should be reviewed to ascertain whether it is either: The courts have, however, recognized the possibility of joint ventures existing in the province of Québec in very restricted circumstances.
#BENEFIT OF JOINT VENTURE CODE#
(4) The Civil Code of Lower Canada and the Civil Code of Québec do not, and never have, recognized the existence of joint ventures ("coentreprise") as such. Although early decisions have hampered the development of independent principles for joint ventures making it hard to distinguish between the two arrangements, there is now some evidence that Canadian courts recognize the existence of joint ventures and view joint ventures as relationships other than partnerships. (3) The common law did not always recognize the existence of joint ventures and, until recently, frequently characterized joint ventures as partnerships. For example, where a joint venture is organized so that one participant handles the day-to-day activities it may be mistaken for a limited partnership in which a general partner with unlimited liability carries on the day-to-day management of the partnership for one or more limited partners, whose liability is limited to the amount of their investment in the partnership. (2) The organization of partnerships and joint ventures is frequently similar, and they have some common characteristics. However, since confusion exists as to the precise legal nature of a joint venture, there is no common definition of "joint venture". Therefore, the rules of statutory interpretation require that the common meaning of "partnership" and "joint venture" apply. (1) The Excise Tax Act does not define either "partnership" or "joint venture". Making this distinction can be difficult for the following reasons:
#BENEFIT OF JOINT VENTURE REGISTRATION#
To determine whether registration is permitted for the contractual entity or whether the parties to the contract can make a joint venture election, it is necessary to distinguish a joint venture arrangement from a partnership arrangement. To simplify the administration of the GST/HST for joint ventures, section 273 of the Excise Tax Act permits the operator of a qualifying joint venture (other than a partnership) and any other participant in the joint venture, to elect to designate the operator as the person responsible for accounting for the GST/HST on all properties and services supplied, acquired, imported or brought into a participating province for or on behalf of the joint venture participants. Under the general GST/HST each participant in a joint venture (which is not a partnership, corporation or trust) must account separately for the GST/HST payable on its purchases and collectible on its supplies, whether they are made directly by the participant or through the joint venture operator acting as its agent. (2) the participants in a joint venture may register for the GST/HST in respect of joint venture activities, but the joint venture may not. (1) a partnership may register for the GST/HST in respect of partnership activities (refer to Policy Number P-216 for information concerning the eligibility of some corporate partners to register for the GST/HST in respect of partnership activities), and Provided all of the other conditions for GST/HST registration have been met,
According to subsection 123(1), a partnership is a "person" for GST/HST purposes whereas a joint venture is not, unless it takes the form of a corporation, a partnership or a trust. Only "persons" are permitted to register for the GST/HST under section 240 of the Excise Tax Act. Subsection 123(1) and section 273 of the Excise Tax Act.(the ETA) Please note that the following Policy Statement, although correct at the time of issue, may not have been updated to reflect any subsequent legislative changes.ĭistinguishing between a joint venture and a partnership for the purposes of the section 273 joint venture election.
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