How To Register LLP in Nigeria
Limited Liability Partnership in Nigeria
A Limited Liability Partnership (LLP) is one of the laudable innovations of the Companies and Allied Matters Act (CAMA) 2020. It is essentially a fusion of the features of a partnership and a company where a group of individuals can pool resources together to establish a business and have their liability limited similar to that of shareholders in an incorporated company, as opposed to a general partnership where liabilities were not limited.
Part C, Sections 746-788 of CAMA 2020 introduces LLP. For persons intending to engage in a partnership, this presents an opportunity to do so and acquire the benefits of being regarded as a separate legal entity that can sue and be sued in its name, acquire, own, hold, develop and dispose-off immovable or movable property, have a common seal (optional) and perform any other acts a body corporate may engage in lawfully.
The following are the procedure and requirements to register an LLP in Nigeria:
Step 1 – Reservation of Name
The first step is to reserve the name of the proposed LLP. Two (2) names are usually requested to determine the availability of either and approve One (1) for onward use to carry out registration. An availability code is given upon approval.
Step 2 – Registration
The availability code gives access and upon payment of the required fee to the form, CAC/LLP 01 (Application to Register a Limited Liability Partnership). The following details are required to be provided.
- Approved LLP name
- Details of at least 2 partners
- 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
Section 788 CAMA 2020 further recognizes the operation of a foreign LLP, which must be registered if it intends to carry on business in Nigeria. However, the Minister has the power to grant an exemption. Regulation 22 of the Companies Registration, 2020 states that a foreign LLP may apply to the Minister for exemption if it is:
- An LLP invited to Nigeria by or with the approval of the Federal Government to execute any specified individual project.
- An LLP in Nigeria for the execution of specific individual loan projects on behalf of a donor country or international organization.
- LLP owned by a foreign government and engaged solely in export promotion activities.
- An engineering and technical expert engaged on any individual specialist project under contract with any of the governments in the Federation or any of their agencies or with any other body or person, where such contract has been approved by the Federal Government.
In conclusion, prior to the introduction of LLP by CAMA 2020, businesses that intend to take the form of a partnership could only register as business names, and while this reduced cost of registration and tax liability, the partners’ personal assets were unprotected from liability. The Partnership Law of Lagos State 2009, however, provided the opportunity albeit only within the territory of Lagos to further register as an LLP. However, with this innovation, any business in Nigeria can register as an LLP.