Legal Implications Of Partnerships In Nigeria

The varying advantages and disadvantages that accompany different business structures
in Nigeria influence an individual’s business preference.
Partnerships, in their various forms have a number of legal Implications. It is very
important to determine these legal Implications and business effects that accrue to
these partnerships. This will guide one’s choice of a partnership structure.
We already determined in our earlier article that there are two major partnership
structures. The limited partnership and the limited liability partnership. These forms are
the innovations introduced by the recent CAMA.
Legal Implications Of Limited Liability Partnerships
A Limited Liability Partnerships has all the incidences of legal personality that accrues to
a private limited liability company. This is perhaps the most striking feature of a LLP.
There is no limit on the membership of a LLP.
Due to the limitation in liability of partner members of the LLP and its unique legal
personality, the assets of the partnership generally can not be used to settle debts and
liabilities of the LLP.
Liability of partners is to the extent of their individual asset contributions.
Limited Partnerships
Limited Partnerships do not have legal personality and so, cannot be sued or sue as a
corporate legal entity.
LPs must consist of at least one general partner having unlimited liability for debts and
liabilities of partnerships and at least one limited partner.
The maximum number of partners a limited partnership is permitted to have is twenty.
LPs are generally not as expensive to run and maintain as LLPs.
Importantly, the LLPs is apparently suitable for persons who want to enjoy the
incidences and corporate qualities of a registered company but still wants to remain a
partnership in the real sense. Both partnership structures have their upsides and
downsides and a critical evaluation of both effects would be desirable for persons
interested in setting up a partnership structure.