The Companies and Allied Matters Act (CAMA) 2020 introduced the registration of Limited Liability Partnerships and Limited Partnerships by virtue of sections 754 and 797.
The Limited Partnership (LP) is an arrangement that consists of at least one general partner, who will be liable for all debts and obligations of the firm, and at least one limited partner. The liabilities of a general partner are unlimited while the liabilities of a limited partner are limited (unless he takes part in the management of the partnership). It is worthy of mention that only a maximum number of 20 partners may form a Limited Partnership.
The Limited Liability Partnership (LLP) is a body corporate with perpetual succession and having the liability of its partners limited to the amount agreed to be contributed or what is outstanding in the event of winding up. There are at least two “designated partners” in an LLP who will be responsible for compliance with the requirements of CAMA by the LLP. The Designated Partners shall be individuals at least one of whom must be resident in Nigeria.
In furtherance to these provisions, the Corporate Affairs Commission (CAC) has issued a notice on the commencement of registration of Limited Partnerships and Limited Liability Partnerships on the CAC’s Company Registration Portal (CRP) here.
The new innovations of CAMA promotes the ease of doing business in Nigeria. For instance, a more innovative business structure may be to register an LLP because it has separate corporate personality, perpetual succession, and the power to enter into contracts as a legal entity. Additionally, it is less cumbersome and expensive to set up than an actual company limited by shares or guarantee.