Limited Liability Partnership Agreement (Nigeria)

A Limited Liability Partnership Agreement in Nigeria records the capital, voting and profit-sharing arrangements binding the co-owners of the business.

CAMA 2020 introduced the LLP as a new business vehicle in Nigeria, replacing and modernising the prior framework under the Business Names Act. Under CAMA 2020, Sections 746 to 819 govern the formation, management, and winding up of LLPs. Every LLP must have at least two designated partners — at least one of whom must be an individual ordinarily resident in Nigeria — who are responsible for filing annual returns and complying with the Act's disclosure requirements. The LLP has a separate legal personality from its partners, can own property, enter into contracts, sue and be sued in its own name, and continue in existence regardless of changes in partnership membership.

The LLP Agreement is the foundational constitutional document that governs the rights and obligations of the partners inter se and the management of the LLP's business. Unlike a company's Memorandum and Articles of Association, an LLP Agreement is not required to be filed at the CAC (unless the partners elect to do so) — it is a private document. In the absence of an LLP Agreement, the default provisions in the Second Schedule to CAMA 2020 apply, which may not reflect the partners' intentions regarding profit sharing, decision-making, or exit arrangements.

The LLP structure is particularly suited for professional practices — such as law firms, accountancy practices, and consulting businesses — that wish to share management responsibilities and profits while protecting individual partners from personal liability for the negligent acts of co-partners, beyond the protection available under an unlimited partnership under the Partnership Law of the applicable state.

The legal framework governing the Limited Liability Partnership Agreement (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Limited Liability Partnership Agreement (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Partnership Act (Cap. P1, LFN 2004) sets the foundational requirements.

A Limited Liability Partnership Agreement in Nigeria is needed whenever two or more persons or entities are forming an LLP registered under CAMA 2020 and wish to govern their relationship, rights, and obligations through a written agreement rather than relying on the default CAMA 2020 provisions.

An LLP Agreement is needed when a group of professionals — such as solicitors and barristers, chartered accountants under ICAN (Institute of Chartered Accountants of Nigeria), or engineers registered with the Council for the Regulation of Engineering in Nigeria (COREN) — wish to practise together under a single entity with limited liability protection and partnership-style governance.

An LLP Agreement is required when a Nigerian company and a foreign investor wish to form a joint venture as an LLP under CAMA 2020, registering the entity with the CAC and obtaining the necessary approvals from the Nigerian Investment Promotion Commission (NIPC) under the NIPC Act (Cap N117, LFN 2004).

An LLP Agreement is needed when existing general partners in an unlimited partnership wish to convert their business to an LLP under the conversion provisions of CAMA 2020 to obtain limited liability protection, particularly where the partnership has grown to a size where the personal liability exposure of individual partners has become commercially unacceptable.

An LLP Agreement is required when professional services firms bidding for government contracts under the Public Procurement Act 2007 wish to participate as a formal LLP entity with a CAC registration number, which is required for procuring entity due diligence and contract award to an identified legal entity under BPP guidelines.

Parties in Nigeria should prepare a Limited Liability Partnership Agreement (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A Limited Liability Partnership Agreement in Nigeria must contain the following essential elements.

LLP Name and Registration: The registered name of the LLP (which must include 'Limited Liability Partnership' or 'LLP' as required by CAMA 2020, Section 750), the CAC registration number, and the registered office address in Nigeria.

Partners: Full legal names, addresses, and CAC RC numbers (for corporate partners) of all partners, and identification of designated partners (a minimum of two, with at least one being an individual resident in Nigeria, under CAMA 2020, Section 754).

Contributions: Each partner's agreed contribution — whether in cash (NGN amount), property (with valuation), services, or a combination — and the basis on which contributions are credited to each partner's capital account.

Profit and Loss Sharing: The ratio in which profits and losses are shared among the partners. In the absence of an express provision, the CAMA 2020 Second Schedule default provides for equal sharing.

Management and Decision-Making: How the LLP is managed — whether all partners participate equally in management, whether management is delegated to designated partners or a management committee, what decisions require unanimous consent versus simple majority, and what quorum applies to partner meetings.

Admission and Retirement of Partners: The procedure for admitting new partners (including required contribution, voting thresholds, and CAC notification obligations under CAMA 2020, Section 762), and the procedure and financial consequences of a partner's retirement, death, or expulsion.

Dissolution and Winding Up: The circumstances in which the LLP may be dissolved — voluntary dissolution by partner resolution, or court-ordered winding up under CAMA 2020, Part C — and the priority of distribution of assets on dissolution.

Governing Law: Laws of the Federal Republic of Nigeria, with CAMA 2020 as the governing statute and jurisdiction in the Federal High Court or the High Court of the relevant state for disputes.

Additional compliance elements for a Limited Liability Partnership Agreement (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.