In our article on the Companies and Allied Matters Act (CAMA) 2020 (the "Act"), we had highlighted some of the key developments introduced by the Act. A significant development was the introduction of a Limited Liability Partnership (LLP) as an entity that can be set up in all states in Nigeria. At the time the Act was signed into law, the procedure to be adopted by the Corporate Affairs Commission (CAC) for the implementation of the changes introduced by the Act (including the LLP) was yet to be provided.
The Nigerian Ministry of Industry, Trade and Investment has now published the Companies Regulation 2021 (the "Regulation") which provides details and clarity on the implementation of the changes introduced by the Act.
In view of the substantial requests we have received, with respect to how an LLP can be incorporated in Nigeria, we are pleased to set out below, the process for the incorporation of an LLP as detailed in the Regulation.
The LLP Structure
An LLP is a body corporate with perpetual succession and a separate legal personality from its partners. It is a structure that combines the benefits enjoyed by the business name structure and the limited liability status enjoyed by companies limited by liability.
By Sections 747 and 748 of the Act, every LLP is to have at least 2 partners who may be an individual or body corporate, provided such person has not been found by a court in Nigeria or elsewhere to be of unsound mind and is not an undischarged bankrupt.
Procedure for registration of an LLP
- A name availability check should be conducted at the CAC and when the proposed name is available, the name is to be reserved.
- A Form CAC/LLP 01 is to be completed with the following information:
- the approved name of the LLP;
- the proposed business of the LLP;
- the proposed registered address of the LLP;
- the full name and particulars of each partner and their contribution;
- the full name and particulars of each person who is to be a designated partner (a designated partner is a partner that will be responsible for compliance with the provisions of the Act and will be liable for all penalties imposed as a result of a contravention of the law). There must be at least 2 (two) designated partners who are individuals and at least one of them must be resident in Nigeria;
- details of any partner in the LLP that will have significant control (i.e. an individual, company or other entity that directly or indirectly holds at least 5% of the interest or voting rights or holds the right to appoint or remove a majority of the partners or has the right to exercise significant control or influence over the LLP); and
- any other information as may be prescribed by the CAC from time to time.
3. The required fee for registration is to be paid to the CAC.
4.Where the above requirements have been complied with, the CAC shall within 14 days of the submission of the application register the LLP and issue a certificate of incorporation stating the name, date, and registration number of the LLP.
In addition to the foregoing, it is useful to note that a foreign LLP may apply to the Minister of Industry, Trade and Investment for exemption from incorporation in Nigeria where the LLP is: (i) invited by the Federal Government to execute a specified individual project; (ii) in Nigeria to execute a specific individual loan project on behalf of a donor country or international organisation; (iii) owned by a foreign government and engages solely in export promotion activities; or (iv) an engineering and technical expert engaged by any government of the federation or its agencies to carry out any individual specialist project.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.