Vinet – Quebec Court of Appeal affirms that the activities of an individual were as president of the general partner rather than on behalf of the LP for s. 96(2.4)(a) purposes
An individual, who was the sole limited partner of a Quebec limited partnership (“SEC”) that owned and operated multiple farms, and the president of its general partner, argued that he was not a limited partner under the Quebec equivalent of ITA s. 96(2.4)(a), so that he could deduct his share of a substantial loss of the LP. He relied in this regard on s. 2244 of the Civil Code, which provided that a limited partner “may not negotiate any business on behalf of the partnership or act as mandatary or agent for the partnership,” and pointed to his involvement in the business of the LP including negotiating with suppliers and making various purchases.
The Court of Appeal found no error in the findings of Breault JCQ below in connection with confirming the ARQ’s application of the s. 96(2.4)(a) equivalent, including that the identified activities of the individual in relation to SEC were “more linked to his role as mandatary or representative of the general partner” rather than of SEC, so that he had limited liability.
Neal Armstrong Summary of Vinet v. Agence du revenu du Québec, 2019 QCCA 574 under s. 96(2.4)(a).