29 Dec



Partnership in Nigeria is regulated By:

  • Common law rules:
  • Rules of equity.

Statutory Enactments: like the UK partnership Act 1890[1], 1999 constitution (provided for in the Concurrent Legislative List), Partnership Laws of the various states), 1990 CAMA: (Section 19 which mandates registration when parties are more than 20 excluding lawyers and accountants), State Laws: Like the Lagos State Partnership Law CAP P1 Laws of Lagos State of Nigeria 2015. This law consists of 83 Section divided into 5 main parts.

:: A partnership is a relationship between two or more persons who carry on business[2] in common[3] with a view to make profit[4]Section 3 Partnership Law of Lagos[5]. In Smith V Arnesen, it was defined as a participation which is devoid of a legal entity. A partnership is an association built on trust and confidence.

Each partners are both agents and principals of one another at the same time. This is unlike the conventional agency relationship where it is easy to decipher the agent from the principal.

:: The mere fact that two or more are joint tenants or tenants in common or two or more are to share profits from an undertaking does not create a partnership-Section 4 PL, Cribb V Korn Nor does granting of loan, proft , remuneration of servants fro business engaged in or child receiving annuity or deferred creditors. The most important thing is the intention of the parties-Ford V Conber

:: Partners are collectively known as a firm.

:: The Partnership Legislations govern partnership. The various States have their partnership laws… The Eastern and Northern States use the Partnership Act 1890.

:: Partnership is a matter on the Concurrent Legislative List[6].

:: Partnership property is separate and not that of a partner. Therefore, it cannot be used to offset a partner’s debt. However a partner’s interest in the partnership can be charged to execution of debt-Section 25 PL.

:: The partners are agents[7] of one another and agents of the firm when transacting partnership business. Section 7 and 9. They are accountable to the one another and the firm. A partner can sue another partner who breaches the partnership agreement. This should be done timeously-Section 15 PL

Section 25 PL provides the following:

  • A partner is entitled to be indemnified for his personal liability incurred in the execution of partnership business/endeavours.
  • Each partner is entitled to partake in the management of the business.
  • Partners are generally not entitled to remuneration.
  • All existing partners must consent[8] before the terms/nature of the partnership agreement can be varied.
  • In ltd partnership no member can be introduced without the consent of other partners.
  • Partnership books must be kept at firm’s principal place of business.

A partnership may be terminated/dissolved

  • On the expiration of the fixed term (where any).
  • When the purpose/venture for which it was set up has been accomplished/terminated.
  • When a partner seeks to dissolve the partnership after notifying others-Section 33.
  • When the business becomes unlawful.
  • When a partner dies or goes bankrupt-Section 34-36, Wood V Woad.
  • Where there are only two partners and one partner is expelled, the partnership automatically comes to an end.

LIMITED PARTNERSHIP: This (to some extent) fuses limited liability with the concept of partnership. A Limited Partnership consists of more than 20 persons who are either general[9] or limited partners[10]. The LP should be registered with the Registrar of Limited Partnerships. If there is no registration[11], the LP becomes GP. Note that LPs do not have a separate legal personality and the death or bankruptcy of a partner does not serve as a ground for dissolution of the partnership.

The limited partner’s influence and importance is restricted. E.g.

  • He should not be involved in the management of the partnership business else he would be regarded as a general partner.
  • He should seek the consent of the general partners before assigning his interest.
  • His consent is not needed when a new partner is sought to be introduced.
  • He cannot dissolve the partnership by notice-Section 40-50 Partnership Law Of Lagos.

The difference between the GP and LP is that in the LP there must be at least one general partner on whom liability rests.

LIMITED LIABILITY PARTNERSHIP: recently introduced[12] by the Partnership Laws of Lagos State by Partnership Amendment Law 2008 (See Sections 58-84).

:: Under the LLP, partners can limit their liabilities[13] but there must be at least one partner with unlimited liability.

:: The LLP has a separate personality and property… it can sue and be sued-Section 58 LLPLLagos.

:: Each partner is an agent of the partnership but not of one another.

:: The LLP should be registered at the Limited Partnership Registry of the State and “LLP” should appear at the end of its name-Section 59.

:: Unlike under Limited Partnership, under LLP, a partner with limited liability can take part in the management of the business.

:: There shall be “designated partners[14]” responsible for the administrative functions… they shall communicate with and keep the LPP Registry up to date with changes in the LLP. The designated partners shall also prepare and deliver annual returns, and act on behalf of the partnership in winding up or dissolution processes.

The Business liability should also be insured, the LLP should register each mortgage or charge it creates within 6 days else void.

Where the partnership is dissolved, the registrar should be notified within 14 days.

:: A partner may cease to be so if

  • He resigns after giving reasonable notice to the other partners. Such resignation shall take effect after the notice has been communicated to the Registrar.
  • He dies, goes bankrupt or wound up[15] or his estate is levied with execution or he grants a trust deed for the benefit of his creditors or assigns his share in the LLP to another.

Section 70 which mandates llps to maintain a professional or business liability insurance cover against stealing, fraud and dishonesty.

Unlike LPs, LLPs enjoy tax advantages under the cita.



Dealt with under Part B of the CAMA. Section 588 provides; “business name”, means the name or style under which any business is carried on whether in partnership or otherwise.

When to Register Business Name: a business name that is not the full name, surname, and (or) initials, or surname of the business owner (s) must be registered within 28 days of commencing business. See Section 573 and 574 CAMA.

A company would be required to register its business name where there is an addition or substraction to the company’s registered name. that is where the name in the CAC register is not exactly the name it uses to carry on business. E.g. Etisalat is known as Etisalat. But in the Companies Register, it is Etisalat Communications Nigeria Limited. That name Etisalat should be registered.

Registration also NOT needed if a business is carried on by Receiver or manager appointed by court (just add in receivership to the name) or addition merely indicates that the business is carried on in succession (just add under new Management to the name).

Section 574 provides the procedure:

Requisite particulars should be furnished to the Registrar at the Registry in the state where the principal place of the firm’s business is-Section 574.

Upon receipt, the registrar is to enter the information in the register-Section 575. The registrar shall then issue a crertificate of registration in this regard-Section 576 after the payment of requisite fees-Section 577, the name may be removed in deserving circumstances (like where the registered holder neglects to commence business or the partners are dead-Section 578. Certain names (like Federal, National, etc.) are prohibited and restricted under Section 579 CAMA.



[1] which is a Statute of General Application.

[2] Smith V Arnesen.

[3] Lang V James Morrison and Co Ltd.

[4] Re Spanish Prospecting Co Ltd. The profit is shared in determined proportion.

[5] A similar definition is provided in Section 1 of the UK Partnership Act. See also Section 558 of the CAMA which defines a firm as a partnership. The word “partnership” is however not defined in CAMA.

[6] Unlike the regulation of Companies which is in the Exclusive Legislative List.

[7] Actual, apparent or ostensible authority

[8] Implied, constructive or express

[9] With unlimited liability. They (or he) shall be concerned with the management and administration of the partnership.

[10] Who shall only be liable to the amount they have contributed at the time of entering the partnership.

[11] Registration is to be done with the registrar of LPs

[12] This form of partnership has been in existence in the USA.

[13] Such liability can become unlimited where the partner acted in his/her personal capacity or where there has been fraud, misrepresentation, etc- Section 58 and 72 of the Partnership Law (as amended)

[14] Not less than 2 in number. Else, every member of the partnership shall be deemed to be a designated partner-Section 70.

[15] In the case of an individual and co respectively.


Quite eccentric really

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