CRA indicates that a French limited partnership was a corporation

At the 2018 IFA Roundtable, CRA noted that it had declined to rule that a specific French SLP (Société de Libre Partenariat) was a partnership for ITA purposes. Although it had separate legal personality (and the general partner had unlimited liability unlike the general partner of a Delaware LLP or LLLP), that was not sufficient to render it a corporation. However, there was no legal authority to support an effective entitlement on the part of the members to share profits and losses earned through the entity: the computation of earnings at the SLP entity level, with a distribution mechanism for its members akin to the declaration and payment of dividends, was found to be very relevant.

In the published response, CRA noted that the particular SLP was a “Fonds Professionnel Spécialisé” – established as a “société en commandite simple” (“SECS” - usually translated simply as a "limited partnership," or sometimes as a "standard limited partnership") – and stated that:

A SECS is considered to be a “société commerciale” under French law, as is also the case for a “société en nom collectif”, “société à responsabilité limitée” and a “société par actions”.

In Quebec, SENCs are general partnerships which have been judicially found to not have separate legal personality but to have their own patrimony (so that partners do not own the partnership property). The above reference in the same breath to (French) SENCs as to SECSs likely is not a concern given French SENCs' apparent lack of legal personality, whereas the French limited partnership was considered by CRA to have separate legal personality.

This pronouncement is a further warning that a foreign entity that is termed a limited partnership may be viewed by CRA as a corporation.

Neal Armstrong. Summary of 16 May 2018 IFA Roundtable Q. 8, 2018-0749481C6 under s. 96.