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.

New law

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.

“Embrace it”

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.”