Limited Liability Partnerships (LLPs)
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Limited Liability Partnerships (LLPs) Registration Starting at just N120,000.00
Register Your Company Today
Limited Liability Partnerships (LLPs) Registration Starting at just N120,000.00
Register Your Company Today
Note:Government fees for incorporation are extra and it varies from state to state. T&C
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Companies And Allied Matters Act (CAMA) 2020
Registering your entity as a limited Liability Partnership is a welcomed idea and acceptable under the Company and Allied Matters Act (CAMA 2020). in this article you will get to know what a Limited Liability Partnership (LLP) is, the features of LLP, the requirements and the effect of registering your entity as Limited Liability Partnership(LLP)..
A limited liability partnership (LLP) provides the ideal legal structure for entrepreneurs looking to launch their own businesses, especially in a professional sector such as law, accountancy, architecture, or engineering.
For an entity to carry on business as a limited liability partnership, that entity must first be incorporated as a Limited Liability Partnership with the Commission by two or more partners for a lawful purpose. The steps in registering a limited liability partnership are:
1. Take Instructions: The instruction is as follows: name and alternative name of the partnership; type of partnership; the business of the LLP; registered address and head office (if any) of the LLP, Partners detail (for example, name, nationality, gender, date of birth, identity type, identity number); partners usual address, details of designated partners, details of the person with significant control, remuneration, dispute resolution, dissolution and winding up.
The legal liability of a Limited Liability Partnerships (LLPs)'s stockholders is restricted. You will be responsible for paying the liabilities of the company as a shareholder to the extent of your contribution. This protects your personal assets to cover the company's debts.
The company in itself is recognised as a legal entity and is responsible for the management of its liabilities and assets. This prevents the creditors from claiming personal assets of the directors and shareholders for money recovery.
Registered Company Limited By Guarantee functions continuously until it is officially dissolved and this is called perpetual succession. It is a state where the death of any founders of the company does not affect its existence.
A registered Company Limited By Guarantee is perceived as a legal entity and is capable of raising funds. Entrepreneurs can raise capital through equity and expand their business within the provided time limits of the liability.
Registered private limited companies provide access to director information and other crucial data of the company. This increases the trust factor of the general public and the investor. All the important details of the company and the directors are published in the MCA portal.
Unlike public limited companies, in a Limited Liability Partnerships (LLPs), shares can be easily transferred from one person to another without having an impact on the company's operations. This provides greater flexibility for shareholders and also makes it attractive for investors.
Private companies are treated as separate legal entities and can own properties acquired and cell under their name. This helps the company manage its assets independently of the personal assets of the shareholders.
Members of a Limited Liability Partnerships (LLPs) can act as both shareholders and employees of the company. This improves the company's operational efficiency and overall governance.
The company can initiate legal proceedings and can also have legal actions taken in its name. This ensures that all the legal matters handled in the company's name protect the shareholders from their personal liability.
Private limited companies, when registered, have better access to funding from banks and other financial institutions. This enables the company to fund itself and operate as a separate legal entity in the future.
The legal liability of a Limited Liability Partnerships (LLPs)'s stockholders is restricted. You will be responsible for paying the liabilities of the company as a shareholder to the extent of your contribution. This protects your personal assets to cover the company's debts.
The company in itself is recognised as a legal entity and is responsible for the management of its liabilities and assets. This prevents the creditors from claiming personal assets of the directors and shareholders for money recovery.
Registered Company Limited By Guarantee functions continuously until it is officially dissolved and this is called perpetual succession. It is a state where the death of any founders of the company does not affect its existence.
A registered Company Limited By Guarantee is perceived as a legal entity and is capable of raising funds. Entrepreneurs can raise capital through equity and expand their business within the provided time limits of the liability.
Registered private limited companies provide access to director information and other crucial data of the company. This increases the trust factor of the general public and the investor. All the important details of the company and the directors are published in the MCA portal.
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Unlike public limited companies, in a Limited Liability Partnerships (LLPs), shares can be easily transferred from one person to another without having an impact on the company's operations. This provides greater flexibility for shareholders and also makes it attractive for investors.
Private companies are treated as separate legal entities and can own properties acquired and cell under their name. This helps the company manage its assets independently of the personal assets of the shareholders.
Members of a Limited Liability Partnerships (LLPs) can act as both shareholders and employees of the company. This improves the company's operational efficiency and overall governance.
The company can initiate legal proceedings and can also have legal actions taken in its name. This ensures that all the legal matters handled in the company's name protect the shareholders from their personal liability.
Private limited companies, when registered, have better access to funding from banks and other financial institutions. This enables the company to fund itself and operate as a separate legal entity in the future.
As per MCA guidelines, a Company Limited By Guarantee must be registered with at least two directors and shareholders. While stockholders may be either natural people or corporate entities, directors must be people. Additionally, a registered office address in Nigeria is mandatory. The following criterias must be met while filing for Limited Liability Partnerships (LLPs) registration:
As per the MCA, a checklist has to be met for registering your company. Here is a clear outline of a checklist for Limited Liability Partnerships (LLPs) registration to follow:
The following necessary documents are crucial for Limited Liability Partnerships (LLPs) registration in Nigeria:
Types of Limited Liability Partnerships (LLPs)
In Nigeria, private limited businesses are differentiated into different types based on share distribution and other aspects. Here are 3 different types of PVT ltd Companies:
These are the most common types of private limited companies.In this type the company has a share capital. And the liability of the shareholders are capped based on the quantity of unpaid shares.
This type of company does not have a share capital. The firm's members commit to donate a specific sum to the company's assets in the event that the company is wound up.
In this type there is no limit on the liability of the members. This type is uncommon as it puts its members at greater risk.
The characteristics of a Limited Liability Partnerships (LLPs) include restricted share transfers, a separate legal entity status, and limited responsibility for shareholders. Here is a clear outline of the same:
To register a Company Limited By Guarantee in Nigeria, you need to obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the proposed directors, and then file the incorporation documents with the Ministry of Corporate Affairs (MCA) through the online SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form. E-legal offers an easy, three step process for business registering:
Consult our Experts
Provide all the Required Documents
FIle MoA, AoA, PAN, TAN and Get
Incorporation Certificate
After you finalise an unique name for your company our team will check for the name availability we will file a RUN form or SPICe-A form. Post name approval our team will file SPICe-B form.
We file form DIR-3 and help you to procure your Director Identification Number (DIN) and Digital Signature Certificate (DSC), which are essential for online document filing.
We will file your Incorporation Documents like MoA, AoA, Spice+ form and will make sure that your company gets its PAN and TAN ensuring all necessary paperwork is submitted accurately. MCA provides the certificate of incorporation post registration.
There are several criteria that determine the total fees structure to form a private limited business in Nigeria. Fees like stamp duty and government fees are required. Professional fees will be assessed if you engage any experts. Apart from this, applications for filing DSC, DIN, Notary fees, PAN, TAN and GST registration should be accounted for. An all-in-one platform for online Company Limited By Guarantee registration in Nigeria is offered by E-legal. Depending on your demands, you can choose from our affordably priced packages and begin the registration process.
As per Section 12(1), a company must have a registered office within 30 days of incorporation. Additionally, PAN and TAN applications should be submitted, leading to the company's registration under the Income Tax Act, 1961. As per MCA guidelines all the registered private limited companies should meet all the following compliance requirement:
As per Section 173(1) the companies Act 2013 registered Company Limited By Guarantee should conduct its first board of directors meeting within 30 days of incorporation.
Having a current account under the company's name is crucial for business operations.. As per law, a company is a legal entity and the financial transaction should be conducted in its name not in the name of an individual.
With respect to Section 12 (1) of the Companies Registration Act of 2013 registered business should have an official address within 30 days of incorporation. This address is the point of contact for receiving communications from government authorities. The official address should be informed to the resistor within the first 30 days of company incorporation.
Registered company name should be displayed in all the business locations. The local language should be used in the billboards. Seals and Letterheads should be prepared.
The board of directors should appoint an auditor as per Section 139(1) within 30 days of company registration.
In the first board meeting, all the directors of the company should declare their interests with respect to other companies. According to Section 184 of the Companies Act of 2013, this is required. Companies are required by law to keep a statutory register at the registered office.
Share certificates must be issued to shareholders within 60 days from the date of incorporation, or in the case of additional share allotments, within 60 days from the allotment date.
As per Section 128, every company must maintain accurate and fair books of accounts, adhering to the double entry system and accrual basis of accounting.
A company needs to get a certificate of commencement of business within 180 days. A disclosure attesting to each subscriber's payment of the outstanding balance on their shares must be filed by directors.
For a Company Limited By Guarantee, copyright registration is essential to protect its original works, such as software, manuals, logos, promotional materials, and other creative content. We have a dedicated team of IP lawyers who can help in copyright registration and other IP related issues.
Professional tax is a state-level tax imposed on professionals and businesses in Nigeria. Employers are required to deduct professional tax from the salaries of employees and remit the same to the state government. The tax rates are fixed by the state government and vary for other states. Our team of chartered accountants can help in the registration and filing of Professional tax in Nigeria.
A Business entity must comply with a number of tax compliances that are divided into three categories namely:
Businesses need to follow these quarterly obligations to comply with Income-tax laws:
Directors and shareholders play a major role in the governance and decision-making processes of a Limited Liability Partnerships (LLPs). The directors are chosen by the shareholders and are responsible for managing day-to-day operations, creating strategic plans, and ensuring legal compliance.The role of a company director is to handle the daily operations of the organisation and make significant strategic and operational decisions to ensure the company meets its objectives. If the company has shareholders, the director may be accountable to them, overseeing how the directors manage the company and sharing in the profits in return for their investment.
Choosing the right company type is crucial for registration. Every company type has different characteristics and provides different benefits to the individuals. Here is a clear outline for the different types of companies:
| Aspect | Proprietorship | Partnership | LLP | Company Limited By Guarantee |
|---|---|---|---|---|
| Registration | No formal registration required | Optional registration under the Partnership Act, 1932 | Registered with the Ministry of Corporate Affairs under the LLP Act, 2008 | Registered with the Ministry of Corporate Affairs under the Companies Act, 2013 |
| Name of the Entity | Promoter’s choice; avoid trademarked names | Avoid trademarked names | The name has to end with ‘Limited Liability Partnership’ (LLP). Subject to approval by the Registrar. | The name ends with ‘Company Limited By Guarantee’. Subject to approval by the Registrar. |
| Legal Status of Entity | Not a separate legal entity; Promoter is personally liable | Not a separate legal entity; Promoters are personally liable | Separate legal entity; Partners not personally liable for LLP's liabilities | Separate legal entity. Directors and Shareholders not personally liable for Company's liabilities |
| Member(s) Liability | Unlimited liability for the Proprietor | Unlimited liability for the Partners | Limited liability for Partners, up to their contribution to the LLP | Limited liability for Shareholders, up to their share capital |
| Minimum Number of Members | Can have only one person as a member | A minimum of two persons are required | Minimum two members are required | Two persons are required to start a PVT Limited Company | Maximum Number of Members | Can have only one person as a member | Maximum of 20 partners | Unlimited number of Partners | Maximum of 200 shareholders or members |
| Foreign Ownership | Not allowed | Not for foreigners | Need RBI and FIPB approval | Permitted under the Automatic Approval route in most sectors for foreigners investing in Company Limited By Guarantee |
| Transferability | Not transferable | Not transferable | Ownership can be transferred | Ownership can be transferred through share transfer |
| Existence or Survivability | Dependent on the Proprietor's existence | Might dissolve due to death of a Partner | Not dependent on the Partners' existence; could be dissolved voluntarily or by an Order of the Company Law Board | Not dependent on Directors or Shareholders; could be dissolved voluntarily or by Regulatory Authorities |
| Taxation | Taxed as an individual based on total income | Partnership profits taxed at 30% plus surcharge and cess | LLP profits taxed at 30% plus surcharge and cess | Company Limited By Guarantee profits taxed at 30% plus surcharge and cess |
| Annual Statutory Meetings | No requirements | Not required | No annual statutory meeting required | Board and General Meetings must be conducted periodically |
| Annual Filings | No annual report filing requirements; file Income Tax Return based on income | No annual report filing requirements; file Income Tax Return for Partnership | LLP must file Annual Statement of Accounts & Solvency and Annual Return; file Income Tax Return | Company Limited By Guarantee must file Annual Accounts and Annual Return; file Income Tax Return |
Proprietorship
No formal registration required
Partnership
Optional registration under the Partnership Act, 1932
LLP
Registered with the Ministry of Corporate Affairs under the LLP Act, 2008
Limited Liability Partnerships (LLPs)
Registered with the Ministry of Corporate Affairs under the Companies Act, 2013
Limited Liability Partnerships (LLPs) FAQs
What is the minimum capital required to start a Limited Liability Partnerships (LLPs)?
There's no specific minimum capital requirement for a Company Limited By Guarantee in Nigeria. It can be started with any amount of capital deemed appropriate by the promoters.
Can a foreign national be a director in an Nigerian Limited Liability Partnerships (LLPs)?
Yes, a foreign national can be a director in an Nigerian Company Limited By Guarantee. However, at least one director should be an Nigerian citizen.
How long does the company registration process take?
The registration process duration varies. On average, it takes about 15 to 25 working days, subject to government processing times, document preparation, and other procedural factors.
Who is eligible to register a Limited Liability Partnerships (LLPs) in Nigeria?
Any individual or entity, including foreigners, can register a Company Limited By Guarantee in Nigeria. The company must have a minimum of two directors and can have up to 200 shareholders.
Which is more advantageous for a startup: One Person Company (OPC) or Limited Liability Partnerships (LLPs)?
Both have their own merits. OPC is the best choice for small firms, and Private Limited Companies are better for larger businesses with several founders.
Who can qualify to be a director in a Limited Liability Partnerships (LLPs)?
Any individual, Nigerian or foreign, who is above 18 years old and not disqualified under the Companies Act can qualify as a director in a Limited Liability Partnerships (LLPs).
Are Private Limited Companies permitted to issue shares to the general public?
No, Private Limited Companies cannot issue shares to the general public. They are restricted to offering shares to a select group of individuals, typically existing shareholders or private investors.
Can the subscriber pages of the Memorandum of Association (MOA) and Articles of Association (AOA) be altered?
No, the subscriber pages of the MOA and AOA, once filed with the Registrar of Companies during incorporation, cannot be altered. Any changes to these documents require passing a special resolution and filing updated documents with regulatory authorities.
Introduction to Private Limited Companies
Starting the Journey
Registration Process
Post-Registration Essentials
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