Overview of Limited Liability Partnership (LLP) in Nigeria Introduction

Overview of Limited Liability Partnership (LLP) in Nigeria Introduction


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Oct 1, 2024

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A Limited Liability Partnership (LLP) is a relatively new legal structure introduced in Nigeria by the Companies and Allied Matters Act (CAMA) 2020.

It combines features of both partnerships and companies, offering flexibility, limited liability protection, and simplified management. This blog post will provide an overview of LLPs in Nigeria, outlining their features, formation process, advantages, and compliance requirements.


What is a Limited Liability Partnership (LLP)?

An LLP is a hybrid business structure that allows partners to operate as a partnership while enjoying limited liability.

Unlike traditional partnerships where partners are liable for the debts and obligations of the business, an LLP offers a shield against personal liability, meaning partners are only liable up to the amount they contributed.

Key Features of LLPs in Nigeria

1. Separate Legal Entity: An LLP is a separate legal entity from its partners, which means it can own property, sue, and be sued in its name.

2. Perpetual Succession: The LLP continues to exist even if a partner dies, retires, or leaves the partnership.

3. Limited Liability: The liability of partners is limited to their contribution, protecting their personal assets from business debts.

4. Flexibility in Management: Partners can manage the LLP directly, unlike companies that require a board of directors.

5. No Minimum Capital Requirement: Unlike some other business structures, LLPs do not require a minimum capital contribution to be established.

6. Formation and Registration Process of an LLP in Nigeria
Name Reservation: Choose and reserve the LLP’s name through the Corporate Affairs Commission (CAC) online portal.

Preparation of Incorporation Documents: Prepare necessary documents, including:

LLP Agreement detailing the rights, duties, and obligations of partners.

1. Identification documents of the partners (e.g., valid ID, passport photographs).

2. Submission of Registration Form: Complete and submit the LLP incorporation form, including details about the partners, registered office address, and other relevant information.

3. Registration Fee Payment: Pay the applicable fees as prescribed by the CAC.

4. Certificate of Incorporation: Once approved, the CAC issues a Certificate of Incorporation, signifying the official registration of the LLP.

Advantages of LLPs in Nigeria

1. Limited Liability Protection: Partners are not personally liable for the LLP’s debts, offering protection against financial risks.

2. Tax Efficiency: LLPs are considered "pass-through" entities, meaning profits are taxed at the individual partners' rates, avoiding double taxation.

3. Operational Flexibility: Partners have the flexibility to decide on the structure and management of the LLP.
Ease of Compliance: The regulatory compliance for LLPs is less stringent compared to companies, making it easier to manage.
Compliance Requirements for LLPs in Nigeria

4.Annual Returns: LLPs must file annual returns with the CAC to maintain their active status.

5. Change Notification: Any changes to partners, the LLP Agreement, or registered office must be reported to the CAC.

6. Tax Compliance: LLPs are required to register for tax identification and comply with Federal Inland Revenue Service (FIRS) requirements.
Differences Between LLPs and Other Business Structures

Feature LLP Limited Liability Company (LLC) General Partnership

Legal Entity Separate legal entity Separate legal entity Not a separate legal entity
Liability Protection Limited liability for partners Limited liability for shareholders Unlimited liability
Management Managed by partners Managed by directors Managed by partners
Taxation Pass-through taxation Company income tax Pass-through taxation


The LLP structure is ideal for professionals, small businesses, and entrepreneurs who want the advantages of a partnership with the benefits of limited liability. By offering flexibility, protection, and ease of management, LLPs have become an attractive option for many businesses in Nigeria. However, it's essential to consult legal professionals and understand regulatory requirements to ensure compliance and successful operation.


This overview provides a basic understanding of LLPs in Nigeria, highlighting why they are a viable option for modern businesses seeking limited liability with the operational advantages of a partnership.

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