Types of Business Entities – Partnership1 min read

For a partnership*, its strength also happens to be its weakness. “Sharing” is a double edged sword that is able to make or wreck a partnership.  As each partner is seen before the law to be an agent of the partnership and the other partners, there is a weightier implication of shared responsibility and you want to be very careful about choosing who you partner with. Liability in a partnership rests with the partners, and not a distinct entity as obtains with a company.

For the LPs or LLPs however, some partners may have their liability limited to the extent of their participation in the partnership. For the LP, there must be at least one general partner with the other partners being able to limit their liability whilst with the LLP under the Lagos State Laws, all the partners may opt to limit their liability although a few exceptions (not relevant for this topic) where this limitation may be discarded with exist.

As occurs with a registered business name, taxation for partnerships is also only at the founders’ level which reduces the money you “dash” the tax-man.

*Except specified otherwise, when using the word partnership here, It means all the available partnership structures in Nigeria, i.e. Partnership in its undiluted state, Limited Partnership (LP), or Limited Liability Partnership (LLP).