NEW PARTNERSHIP LAW UNVEILED IN LAGOS
BY GBENGA OLORUNPOMI
March 24, 2010 12:12AM
Investors got one more reason to do business in Lagos State yesterday as the Commissioner of Justice and Attorney General, Supo Shasore, presented the amended version of the Partnership Law of Lagos State.
This presentation took place at a breakfast meeting with lawyers, professionals and journalists at the Eko Hotels and Suites, Victoria Island.
Dignitaries in attendance included the Commissioner for Economic Planning and Budget, Ben Akabueze.
What has changed?
This new law contains the amendments creating Limited Liability Partnerships (LLP) in business. This means, investors that register their businesses under this law enjoy reduced responsibility if the partnership breaks up or the venture fails.
It also means the partners are immune to lawsuits, if an entity decides to take their company to court. The Lagos State governor, Babatunde Fashola, assented to it in March 2009, although work began on its formulation in 2003.
In the original model, partners could be sued along with the company they set up, and had to pay shareholders out of their pockets if the business winds up.
The desire to protect investors and keep the trend in growing economies around the globe encouraged the Lagos government to push for the law's creation. The Registrar of Partnerships and Director of Commercial Law, Funlola Odunlami, said, 'The newly-amended law is especially a bigger vehicle for the execution of partnerships, who intend to engage in joint trade or business for profit, while enjoying most of the benefits accruable to limited liability companies.'
She said the law made it more convenient to do business.
Mr. Shasore said the Partnership Law had undergone much change in the past, and this was another level in its evolution. The last part of the four-part law is dedicated to the workings of the LLP.
He said the new law come about because of the government's 'quest to do business in a seamless and convenient way.' He also said parts of the concept were borrowed from other countries like Singapore and the United Kingdom.
'The law doesn't seek to incorporate any entity,' he warned. 'You must first of all have a partnership before you can approach this law. When you file on the provisions of the law at the registry, what you are seeking to do is not to incorporate an LLP; what you are seeking to do is register a partnership and give it limited liability.'
During the question and answer session, Mr. Supo assured Lagosians that the law would become universal.
He said states in the United States would soon have a unified law on Limited Liability Partnerships.
Lawyers at the event were encouraged to take advantage of the law to form larger law firms.
Speaking after the event, Mr. Akabueze said the business community would welcome the law.
'They will embrace it. It presents part of our efforts to expand the frontiers of business relationships and grow partnerships as a veritable alternative to structuring large businesses. Before now, there's been a notion that partnerships necessarily have to be small operations. By this law, they can become very large.'