LLPs and LLLPs have various partnership attributes

CRA’s position, that Delaware and Florida LLPs and LLLPs are corporations, is being questioned.

Their partnership attributes include that they are created and dissolved by contract (rather than statute), the partners (unlike shareholders) have mutual agency and can only assign their economic interest (as contrasted to full partner status) and they owe each other and the partnership a duty of loyalty. As for their separate legal personality (like corporations, but also like Scottish partnerships), s. 35 of the Interpretation Act provides that the word "corporation" "does not include a partnership that is considered to be separate legal entity under provincial law."

There is a strong argument that the IA definition applies for greater certainty to ensure that LLLPs and LLPs are not treated as corporations. Further, the phrase "a partnership which is considered to be a separate legal entity under provincial law" does not necessarily limit the application of the IA definition to partnerships governed by provincial law.

Although the Delaware and Florida statutes provide “full shield” protection, limited liability nonetheless is less absolute than for corporations. For example, if a general partner of an LLLP is culpable of tortious conduct toward third parties in the execution of its duties as the manager of the LLLP's business, it is not protected by the LLLP shield. Furthermore, the failure to make filings may result in the loss of limited liability, whereas corporate limited liability is intrinsic to a corporation.

Neal Armstrong. Summaries of Angelo Discepola and Robert Nearing, "A Reply to the CRA's Classification of Florida and Delaware LLLPs and LLPs as Corporations," 2016 Conference Report (Canadian Tax Foundation), 24:1-39 under s. 96 and s. 248(1) – corporation.