Limited Liability Partnership vs Limited Partnership

Before CAMA 2020, Nigeria only had one form of partnership - governed by the old Partnership Act 1890 - where every partner carried personal, unlimited liability for the business's debts. CAMA 2020 changed that by introducing two new structures: the Limited Liability Partnership (LLP) and the Limited Partnership (LP).

Both offer liability protection a standard partnership doesn't. But they work very differently.

What a standard partnership still looks like

A standard partnership - what most people mean when they say "partnership" - is a voluntary association of two or more people running a business together for profit. It has no separate legal identity from its partners, and liability is typically personal and shared. It also dissolves on the death of a partner unless the partnership agreement says otherwise.

CAMA 2020 also caps a standard partnership at 20 partners, except for professional partnerships; law firms, accounting firms which are exempt from that limit.

Limited Liability Partnership (LLP)

An LLP is a body corporate, a separate legal entity from its partners, incorporated the same way a company is. This is the key difference from a standard partnership: an LLP can own property, sue and be sued in its own name, and has perpetual succession, meaning a partner leaving or dying doesn't affect the LLP's existence.

Liability: limited for all partners, except in cases of fraud or illegal activity.

Structure requirements:

• Minimum of 2 partners; no maximum
• At least 2 "designated partners," with at least one resident in Nigeria
• Designated partners are responsible for CAMA compliance filings, returns, and statutory reports

Best for: professional services firms, joint ventures, and foreign companies wanting to operate in Nigeria without the complexity of a full company structure but with the liability protection a standard partnership doesn't offer.

Limited Partnership (LP)

An LP is not a body. Unlike an LLP, it has no separate legal identity from its partners and no perpetual succession, it's structurally closer to a standard partnership, but with one important difference: it splits partners into two distinct roles.

General partners actively manage the business and carry unlimited liability for its debts, the same exposure as partners in a standard partnership.

Limited partners don't participate in day-to-day management, and their liability is capped at whatever they've contributed or agreed to contribute. If a limited partner starts taking part in management, they lose that protection and become liable as if they were a general partner.

Structure requirements:

• Minimum of 2 partners, maximum of 20
• At least one general partner and one limited partner
• Limited partners can inspect the firm's books but can't bind the firm or manage it.

Best for: investment structures where some partners want to be hands-on operators (general partners) and others want to contribute capital without day-to-day involvement or exposure (limited partners) common in real estate ventures, private investment vehicles, and situations where a passive investor wants protection without giving up their stake.

The core differences

	LLP	LP
Legal identity	Separate body corporate	Not a separate entity
Perpetual succession	Yes	No
Maximum partners	No limit	20
Liability	Limited for all partners	Unlimited for general partners; limited for limited partners
Management	All designated partners can manage	Only general partners manage
Winding up	Partners voluntarily, or by court order	Court or general partners

How to register a partnership

1. Take instructions and prepare details partnership name and alternative name, business activity, registered address, details of all partners (name, nationality, gender, date of birth, ID type and number), details of designated partners, and details of Persons with Significant Control
2. Search and reserve your name through the CAC portal two proposed names required, one gets reserved for 60 days
3. File your incorporation documents, including Form CAC/LLP 01, recent passport photographs of all partners, valid ID for each partner, your Partnership Agreement, and evidence of fee payment
4. Download your Certificate of Incorporation once approved

Upon registration, CAC issues your Certificate of Registration, a Status Report, and your Partnership Agreement and maintains a Register of Limited Liability Partnerships and a Register of Persons with Significant Control.

Which one actually fits your situation

• Want full liability protection for everyone involved, and a structure that can own property and sign contracts in its own name? LLP.
• Want some partners actively running the business and others contributing capital passively, with liability matched to their actual role? LP.
• Not planning to raise outside capital, running a small operation, comfortable with shared personal liability? A standard partnership may still be simplest but weigh that against what you're actually protecting.

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Not sure which structure fits how you're splitting ownership and management? Message us on WhatsApp using the button on this page tell us how many partners you have and who's actually running the business day-to-day, and we'll help you figure out what fits.