Registering your entity as a limited Liability Partnership is a welcomed idea and acceptable under the Company and Allied Matters Act (CAMA 2020). in this article you will get to know what a Limited Liability Partnership (LLP) is, the features of LLP, the requirements and the effect of registering your entity as Limited Liability Partnership(LLP).
Limited Liability Partnership is one of the new entities among others introduced in the new CAMA 2020. A limited liability partnership is a body corporate formed and incorporated under the Companies and Allied Matters Act and is a legal entity separate from the partners.
Every limited liability partnership is required to have at least two partners, this partnership shall also have at least two designated partners with at least one of them resident in Nigeria.
A designated partner is one who is responsible for doing all acts, matters, and things that are required to be done by the limited liability partnership in respect of compliance with the provisions of CAMA including the filing of documents, return statements, and other reports under CAMA and as may be specified in the limited liability partnership agreement.
When a person ceases to be a partner, his position as a designated partner comes to an end. By implication, the liabilities of the partners are limited, except in cases of fraud or illegal activities
Some of the features of an LLP include:
- Perpetual succession,
- A right to sue and be sued in its corporate name, right to own property, either movable or immovable, tangible or intangible,
- A change in the partners does not affect the existence, rights, or liabilities of the LLP,
- The use of a common seal, if preferred.
REGISTRATION OF A LIMITED LIABILITY PARTNERSHIP
The process of registration of a Limited Liability Partnership is same with registration of a company in Nigeria. You can read our article on how to register a company in Nigeria. The only difference is the attachment of Partnership Agreement to the documents to be uploaded.
READ ALSO: How To Register Company in Nigeria
DOCUMENTS TO BE ISSUED UPON REGISTRATION OF LLP
- Certificate of registration
- Status Report; and
- Partnership Agreement instead of Memorandum and Article of Association in the case of a Limited Liability Company.
EFFECT OF INCORPORATION OF LIMITED LIABILITY PARTNERSHIP
- Incorporation of an LLP gives it a legal personality separate from the partners.
- It confers limited liability on the Partners.
- It gives the partners the right to sue and be sued in its corporate name.
- Incorporation gives LLP the right to acquire, own, hold, and develop or dispose of the property.
- It confers perpetual succession.
In conclusion, instead of entering into an agreement with someone on business deals and signing an MoU, it is advisable that both of you register a Limited Liability Partnership as that will secure both parties. It is also good for those that deals with international Partners.
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