LLP aka Limited Liability Partnership and LP aka Limited Partnership. These two new entities have been introduced by the Corporate Affairs Commission.
What is LLP?
In this type of partnership, all partners are only limited to the amount they invested or contributed to the business. Their personal assets are separate from the liabilities of the business. In the event of winding up, the partners will only be limited to amount contributed or outstanding of the amount decided by the partners. At least two partners and where one of the partners is a foreigner he or she must have a residential permit in Nigeria. For instance, if certain individuals decide to start a tech company as limited liability partnership and they each contributed 1m each or 500k each, they will only be limited to the amount they invested when liabilities arise. They can all make business decisions.
For limited partnership, there is one general partner and one limited partner.
The general partner in a limited partnership they have unlimited liabilities, oversee business activities, make business decisions and are bound by contract agreements. While the limited partner is only limited to the amount he or she invested in the business. A limited partner is not liable to pay debts. A limited partner can be an investor, who decides to invest money in a business but does not oversee the business activities or is bound to pay business debts. CAC says limited partnership can not have more than 20 partners.
LLP and LP is different from business name and limited company or incorporated trustee.
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