The basic explanation provided here for Limited Partnership (LP) and Limited Liability Partnership (LLP) respectively, is majorly to clarify the meaning, distinctive features, and the status of each entity as prescribed by law. Except for the requirement of Partnership Agreement between the partners, the requirements and the mode of registration of LP and LLP are closely related to those stated under Business Name. You can click here to read about them.
Any Partnership carrying on business in Nigeria that is not registered is regarded as general partnership, in which case the liabilities of the partners to the debts and obligations of the Firm are unlimited. Whereas, a Limited Partnership (LP) is a partnership arrangement with at least one general partner and at least one limited partner. The liabilities of a general partner are unlimited while the liabilities of a limited partner are limited to the amount or property so contributed or agreed to be contributed (unless he takes part in the management of the partnership). The membership of an LP is between 2 to 20 persons. The name of an LP must end with the word “Limited Partnership” or the abbreviation “LP”.
On the other hand, a Limited Liability Partnership (LLP) is a body corporate formed and incorporated under the law as a legal entity separate from the partners and can sue and be sued in its name. An LLP, like a company, has perpetual succession. Any change in its partners does not affect its existence, right, or liabilities.
The liabilities of the partners of an LLP in the event of winding up are limited to the amount agreed to be contributed or what is outstanding in the amount agreed to be contributed to the partnership by each partner. An LLP must have at least two (2) “Designated Partners” who shall be responsible for compliance with the requirements of the CAMA by the LLP. Such designated partners are personally liable to all penalties imposed on LLP in case of contravention of any provision of CAMA. Such Designated Partners must be individuals at least one of whom must be resident in Nigeria. The name of an LLP must end with the word “Limited Liability Partnership” or the abbreviation “LLP”.
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