Tax Benefits of Using an LLP
Until recently, band-owned businesses in British Columbia tended
to be structured in one of three forms:
- owned directly by the band (also
known as a band proprietorship);
- as a company (often called an
economic development corporation); or
- as a limited partnership.
Deciding between these options was generally a matter of
balancing administrative simplicity, liability and tax
efficiency.
Recent tax guidance in British Columbia has suggested that a
fourth type of ownership, the limited liability partnership
("LLP"), can be very efficient from a taxation
perspective. When used correctly, LLPs can result in significant
savings on provincial sales taxes (such as PST and fuel tax) for
businesses owned wholly or in part by Indian bands. These savings
are generally not available to corporations or limited
partnerships.
