Limited Liability Partnership is one of the new innovations among others of 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.[i] Every limited liability partnership is required to have at least two partners. Furthermore, this partnership shall also have at least two designated partners with at least one of them resident in Nigeria[ii]. 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.[iii]. 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
For an entity to carry on business as a limited liability partnership, that entity must first be incorporated as a Limited Liability Partnership with the Commission by two or more partners for a lawful purpose. The steps in registering a limited liability partnership are:
1. Take Instructions: The instruction is as follows: name and alternative name of the partnership; type of partnership; the business of the LLP; registered address and head office (if any) of the LLP, Partners detail (for example, name, nationality, gender, date of birth, identity type, identity number); partners usual address, details of designated partners, details of the person with significant control, remuneration, dispute resolution, dissolution and winding up.
2. Conducting a search for availability and reservation of name online: Log onto the CAC portal using your account already created with the Commission either as a public user or accredited agent. Two names are actually required which are the preferred name or alternative name. On receipt of the application and payment of the prescribed fees, one of the names will be reserved for 60 days. An availability code is given upon approval[iv]
3. Filling and filing of the Incorporation document online: Upon payment of the requisite fees, the next step is filling and filing the incorporation document. The incorporation documents are:
- Form CAC /LLP 01 -Application to Register a Limited Liability Company. The details required to be provided in form CAC/LLP are as follows: Approved LLP name, details of at least 2 partners, details of at least 2 designated partners, one of which must be resident in Nigeria, description of business activity, details of verifiable registered address of the head office, email and phone number, details of all partners, details of persons with significant control, the contribution of each partner to the partnership and partnership agreement[v]
- Recent passport photographs of all partners
- Copy of recognized and valid photo identification for each partner (e.g., driver’s license, national identity card, voter’s card, or birth certificate)
- Partnership Agreement
- Evidence of online payment of filing fee.[vi]
4. Downloading the Certificate of Incorporation: Upon the filing of the incorporation document, the LLP would be registered. The next step is downloading and printing the certificate of incorporation of the LLP
DOCUMENTS CORPORATE AFFAIRS COMMISSION WILL ISSUE UPON REGISTRATION OF LLP
- Certificate of registration
- Status Report; and
- Partnership Agreement
REGISTER KEPT BY THE CORPORATE AFFAIRS COMMISSION
- Register of Limited Liability Partnership
- Index of Limited Partnership
- Register of persons with significant control
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 partnership.
- It gives the partnership 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.
- The certificate of incorporation shall in all legal proceedings (civil and criminal) be received in evidence.
- The certificate of incorporation shall be prima facie evidence that the LLP came into existence on the date of incorporation[vii]
CONCLUSION
The introduction of limited liability partnerships is a welcome development in Nigeria. This is a viable option for foreign companies who wish to carry on business in Nigeria but do want to register as a limited liability partnership.
[i] Section 746 CAMA 2020
[ii] Section 749(1) CAMA 2020.
[iii] Section 750 CAMA 2020.
[iv] Section 747 CAMA 2020.
[v] Chinenye Ajayi, “ Overview of Limited Liability Partnership under the Companies and Allied Matters Act, 2020”, < https://www.linkedin.com/pulse/overview-limited-liability-partnerships-under-companies-ajayi>, accessed on March 17th, 2023
[vi] P.N Ahiarammunnah “Limited Liability Partnership” accessed on March 17th, 2023.
[vii] Ibid.
Written by Deborah Dada for The Trusted Advisors
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