CRA finds that Gabon and Ivory Coast sociétés en commandite simple were partnerships notwithstanding separate legal personality

Before finding that two “sociétés en commandite simple” (the SCSs) formed in the Ivory Coast and Gabon were partnerships for ITA purposes, CRA indicated:

  • Given that the Ivory Coast and Gabon are civil law systems, it was appropriate to primarily compare the SCSs to Quebec partnerships.
  • A comparison of the provisions of the Quebec Civil Code and the Uniform Act governing the SCSs showed substantial similarities, except that Québec partnerships are not legal persons whereas SCSs have legal personality.
  • Nonetheless, a Quebec general or limited partnership has many of the characteristics typically associated with legal personality such as being able or subject to suing or being sued in its own name, and having a separate patrimony – and CRA has “previously stated that the existence of a separate legal personality alone is generally not sufficient to distinguish certain foreign partnerships from Canadian partnerships.”
  • “[T]he unlimited liability of the general partners of an SCS is an important trait that favours partnership status under the Act since the sharing of responsibility for partnership debts is a primary trait of partnerships in Canada while the limited liability of shareholders is generally a primary trait of corporations in Canada.”

Neal Armstrong. Summary of 22 December 2022 Internal T.I. 2021-0892121I7 under s. 96.