Limited Partnership (LP) Registration In Nigeria: All You Need To Know

Are you planning to start a business with other people, attract investors or combine resources to pursue a business opportunity? A Limited Partnership (LP) may be a suitable structure to consider.

In Nigeria, a Limited Partnership is recognised under the Companies and Allied Matters Act (CAMA) 2020 and registered with the Corporate Affairs Commission (CAC). It allows a business to have different categories of partners, with different responsibilities and levels of liability.

At Eloson Technology Limited, we help entrepreneurs and business owners understand registration options and obtain assistance with their CAC registration applications.

A Limited Partnership is a business structure that has at least one general partner and at least one limited partner.

The general partner manages the business and has unlimited liability for the partnership's obligations. A limited partner's liability is generally limited to the amount of their agreed contribution, subject to the applicable law and the restrictions governing their involvement in management.

Under Nigeria's CAMA 2020, a Limited Partnership must have at least two partners and cannot have more than 20 partners.

This structure can be useful when some partners want to manage the business while others primarily contribute capital.

A general partner is responsible for managing the partnership's business and operations.

Key features include:

Under the CAC's published requirements, all general partners in a Nigerian Limited Partnership must be individuals.

A limited partner primarily contributes capital or other agreed resources to the partnership.

Key features include:

A limited partner who participates in management contrary to the applicable legal restrictions may risk losing limited liability protection. The precise consequences depend on the law and the circumstances.

A Limited Partnership may be considered for ventures in which some partners provide management while others contribute funding.

Examples include:

The suitability of an LP depends on the business activity, ownership arrangements and applicable regulatory requirements. Some industries require separate licences or approvals.

An LP allows the partners to agree on different roles. Some can manage the business while others contribute capital without taking on the same management responsibilities.

The structure may appeal to investors who wish to contribute capital to a venture without taking responsibility for its daily management.

The partnership agreement can establish each partner's contribution, share of profits, responsibilities and other terms, subject to applicable law.

CAC registration establishes the partnership's formal registration status and provides relevant registration records.

An LP can bring together individuals with different resources, experience and expertise to pursue a common commercial objective.

Applicants should prepare the information and supporting documents required by the CAC. These generally include:

The partnership's registered name must comply with the CAC's naming requirements and should end with “Limited Partnership” or “LP”, as applicable.

According to the CAC's published Limited Partnership checklist:

Because eligibility requirements can affect whether an application is accepted, applicants should confirm the current CAC rules before proceeding.

The general process includes the following steps:

Select a suitable name for the proposed partnership and check its availability through the CAC registration process.

Determine who will serve as the general partner or partners and who will participate as limited partners.

Decide how much each partner will contribute, who will manage the business and how profits, losses and other responsibilities will be handled.

Prepare an agreement setting out the terms of the partnership, including contributions, profit sharing, management, dispute resolution and exit arrangements.

Gather the partners' details, identification documents, business address and other information requested by the CAC.

Complete the prescribed registration process and pay the applicable statutory and filing fees.

After the CAC processes and approves the application, obtain the partnership's relevant registration documents.

Registration timelines depend on the CAC's procedures, the completeness of the application and whether any queries must be resolved.

Although their names sound similar, these structures are different.

 | Feature | Limited Partnership (LP) | Limited Liability Partnership (LLP)
| Partners | General and limited partners | Partners under an LLP structure
| Management | Generally handled by general partners | Arrangements are governed by the LLP framework and agreement
| Liability | General partners have unlimited liability; limited partners generally have limited liability subject to legal conditions | Partners generally benefit from limited liability, subject to legal exceptions
| Maximum number | Maximum of 20 partners under the CAC's published checklist | Different requirements apply
| Legal structure | Registered partnership under the applicable framework | Separate legal entity under the LLP framework

Choosing between an LP and an LLP should depend on your intended management arrangements, investment structure and liability considerations.

A Limited Partnership is organised around general and limited partners, while a Limited Liability Company is organised around shareholders and directors.

An LP may be appropriate where some participants manage a venture and others contribute capital under limited-partner arrangements. A limited liability company may be more suitable where the owners want a company structure with shares and directors.

Each structure has different legal, tax, governance and compliance implications. Professional advice can help you determine which option is suitable.

Are you ready to establish a Limited Partnership in Nigeria?

Eloson Technology Limited can assist you with understanding the registration requirements and initiating your CAC registration service request.

We support entrepreneurs, investors and business owners who want to formalise their business arrangements and establish a recognised business structure.

Visit the Eloson self-service portal:

Follow these steps:

Our team can guide you on the information and documentation needed for the application.

Please note that submitting a service request through Eloson initiates the assistance process; it does not itself constitute CAC registration or guarantee approval.

A Limited Partnership can provide a structured way for business owners and investors to work together, with distinct roles for those who manage the business and those who contribute capital.

However, it is important to understand the responsibilities and liability exposure of each partner before registration. A properly prepared partnership agreement and accurate CAC documentation can help establish a clear foundation for the business.

If you are planning a business venture with partners, explore whether an LP is the right structure for your objectives.

Visit: https://eloson.org.ng/services/create

Select CAC Services and enter Limited Partnership (LP) Registration in the description field.