Limited Liability Partnership (LLP) Registration

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LLP

Overview of Limited Liability Partnership (LLP) Registration

One of the key developments introduced to the Nigerian business sphere by the Companies and Allied Matters Act (CAMA) 2020 was the introduction of a Limited Liability Partnership (LLP) as an entity that can be registered in all states in Nigeria.

A Limited Liability Partnership (LLP) is a body corporate with a legal personality separate from its members. It is a hybrid business form that infuses two types of business; a partnership and a limited liability company.

This option is suited to a group of professionals (accountants, lawyers, doctors, architects, etc) with lots of experience and clients between them, as it allows them to pool resources together, thereby lowering the cost of doing business while increasing the LLP’s capacity for growth.

By Sections 747 and 748 of CAMA, every LLP is to have at least 2 partners (no maximum) who may be an individual or body corporate, provided such person has not been found by a court in Nigeria or elsewhere to be of unsound mind and is not an undischarged bankrupt.

Benefits

Features of Limited Liability Partnership (LLP)

Here are some of the salient features of Limited Liability Partnership:

1

A hybrid form of organisation

The Government of Nigeria has facilitated a business environment for entrepreneurs, service providers, and professionals by creating a hybrid business structure to meet the global competition such as limited liability partnerships. An LLP can be said to be a hybrid form of organization because it has the features of a partnership firm and a company.

2

Body corporate

A body corporate can be a partner to an LLP. Partners can include the following: An LLP registered under the LLP Act, LLP incorporated outside Nigeria, a Nigerian company that is either private or public, an individual, etc.

3

Perpetual succession

LLP differs from a general partnership in aspects of succession. Unlike a general partnership, LLP firms can continue to exist even after the retirement, death, withdrawal, or insolvency of any of the partners. It can also hold property rights and sign contracts in its name.

4

Separate Legal Entity

Just like any other company, entity, or corporation, LLP is a separate legal entity. While an LLP is entirely liable for its assets, partners involved in it hold limited liability when it comes to their contribution to the LLP. Creditors of an LLP are not the creditors of partners taking part in it.

5

Artificial Legal Person

In order to address various legal aspects, LLP is turned into an artificial legal person. This is done through a proper legal procedure, after which an LLP holds all rights of an individual. It is intangible yet has equal significance in dealing with legal complications.

6

Number of Partners in an LLP

An LLP must include at least 2 partners. Out of two designated partners, at least one has to be a resident of Nigeria. When it comes to the maximum number of partners in an LLP, there is no specified number.

7

Profit Motive

An LLP partnership cannot be formed for charitable work or non-profit purposes. Every LLP firm must carry on a lawful business with the motive of earning returns in the form of profit.

8

Business Management and Structure

Partners included in an LLP firm hold the right to manage a business. However, the right to deal with legal issues lies only with designated partners of the firm.

9

Limited Liability Partnership agreement

The LLP is bound by an LLP agreement which provides the rights and duties of the partners of the LLP.

10

Suffix in name

The name of the LLP should have ‘Limited Liability Partnership’ or ‘LLP’ as their suffix.
Register your Limited Liability Partnership (LLP)

Benefits of Limited Liability Partnership Registration

The key benefits of a LLP Registration are listed below:

  • Separate Legal Entity: An LLP is a legal entity that is separate from its partners. Therefore, it can sue or be sued by a third party. Again, a partner can’t be held accountable for the misconduct or carelessness of the other partner.
  • Limited Liability of Partners: The liability of partners in an LLP is limited to the extent of the amount that they have agreed to contribute.
  • Perpetual succession: The life of the LLP is not affected by the demise, retirement, insolvency, or withdrawal of any of the partners.
  • Better Flexibility: The operation of the partnership and distribution of profits is determined by written agreement between the members. This may allow for greater flexibility in the management of the business.
  • Protecting the partnership name: By registering the LLP with the CAC, you prevent another partnership or company from registering the same name.
  • Low Incorporation Cost And Minimal Compliance: The cost of Incorporating an LLP is relatively low compared to other business structures such as private and public limited companies. Also, the quantum of compliances is on the low for these entities.
  • No Minimum Capital Contribution:  There is no minimum capital investment specified for an LLP. A partner’s contribution consists of both tangible, movable, and immovable or intangible property.
  • No limit on owners of business: LLP requires a minimum of 2 partners while there is no limit on the maximum number of partners in contrast to a private company wherein there is a restriction of not having more than 200 members.
  • Partners: Partners can be added to LLP during incorporation or post-incorporation. The following persons can be partners in LLP: Individuals, Limited liability partnerships, Companies, Foreign Companies, etc.
requirements

Requirements for registering a Limited Liability Partnership (LLP) in Nigeria

You'll have to provide the following details upon Submission;

  • The name of the limited liability partnership - 2 names (A name availability check will be conducted at the CAC and when one of the 2 proposed names is available, the name will be reserved).
  • Details of at least 2 partners (Name, address, signature, passport, I,D, phone, email, etc).
  • Details of at least 2 designated partners, one of whom must be resident in Nigeria.
  • Description of business activity.
  • Details of verifiable registered address and address of the head office (if different from registered address), company’s email, and phone number.
  • Details of members (individual or corporate).
  • Details of Person with Significant Control (one who directly or indirectly has at least 5% of interest, voting rights in the partnership, can remove or appoint a majority of partners and exercise any significant control over the affairs of the company.
  • Contribution of each member to the partnership.
  • Partnership Agreement (We can provide this).

Where the above requirements have been complied with, the CAC shall within 14 days of the submission of the application register the LLP and issue a digital certificate of incorporation stating the name, date, and registration number of the LLP.

F.A.Qs

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Once your incorporation documents have been approved by the Federal Ministry, you will receive your completed business entity package by e-mail/mail.
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Frequently Asked Questions (FAQs)

You can find some of our most frequently asked questions below;

LLP is a type of partnership wherein the liabilities of partners towards the business are limited to the extent of their share in its investments. It helps partners get over the drawback of a general partnership, where they have to take responsibility for all the liabilities alone. This partnership setting is common among solicitors, accountants, and entrepreneurs.
LLP agreement is the mutual deal between all partners which decides the rights and duties of partners. In some firms, a partner can also modify the agreement if he wishes.
One of the significant differences between an LLP and a regular partnership firm is the presence of mutual agency. In a Limited Liability Partnership, independent actions taken by one of the partners do not hold other partners responsible for it. Just like other liabilities, liability for sharing the responsibility for each other’s actions is also limited.All partners involved in it are agents of LLP, and their individual actions are not binding on one another. This is what is a Limited Liability Partnership in business and partnership firms.
The Certificate of Incorporation (COI) in Nigeria is issued by the Corporate Affairs Commission (CAC). The Certificate acts as conclusive evidence of the formation of the LLP.
It usually takes 3-14 business days for the Limited Liability Partnership (LLP) Registration in Nigeria.Name Search: 6 - 24 hours from submission. Grant of Certificate of Registration: 2 - 10 Days from filing. Total time: Approximately 3 - 14 days.

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