business names and partnerships, registration of business names and partnership.

Section 868(1) of the Companies and Allied Matters Act defines a business name as the name or style under which any business is carried on, whether in partnership or otherwise. Business name is the most convenient form of doing business by a sole proprietor or partnership in a more recognizable form.

Every individual, firm or corporation having a place of business in Nigeria and carrying on business under a business name must be registered if:

• a. In the case of a firm or corporation, the name does not consist the true surnames of all partners without any addition other than the true forenames of the individual partners or the initials of such forenames. Section 814 (1) (a) CAMA, 2020.
• b. In the case of an individual, the name does not consist of his surname without any addition other than his true forenames or the initials thereof. Section 814 (1) (b) CAMA, 2020.
• c. In the case of a company, the name does not consist of its corporate name without any addition. Section 814 (1) (c) CAMA, 2020.

Registration is not required in the following cases:

• a. Where the addition indicates that the business is carried on in succession to a former owner of the business.
• b. Where two or more individual partners have the same surname and there is the addition of an “S” at the end of the surname.
• c. The business is carried on by a receiver or manager appointed by any court.

The restricted names are same as those of a company provided under Section 852 of the Companies and Allied Matters Act and they are:

• a. Government names: Names containing the words Federal, National, Regional, State, Government or words that suggest that it enjoys patronage from the federal or state government or any ministry or department of government are restricted.
• b. Municipality or local authority names: Names containing the word ‘municipal’ or ‘chartered’ or in the opinion of the Corporate Affairs Commission suggests or is calculated to suggest that it enjoys connection with any municipality or local authority is restricted.
• c. Cooperative or building society names: Names containing the word ‘cooperative’ or ‘building society’ is restricted.
• d. Group or Holding: Names containing the word “group” or “holding” is restricted.

The prohibited names according to Section 852 (1) (a) – (f) of the Companies and Allied Matters Act, 2020 are:

• a. Identical names: A name identical or resembling an existing name of a company or limited liability partnership as to be calculated to deceive. However, such name can be used where the existing company which bears the name is in liquidation or is in the course of being dissolved and consent has been obtained from that company to the use of that name. See Niger Chemists Ltd. v. Nigeria Chemists Ltd.
• b. Chamber of commerce: Use of a name containing the words "chamber of commerce" is prohibited unless it is a company limited by guarantee. See also Lagos Chamber Of Commerce v. Registrar Of Companies.
• c. Misleading name: Use of a name, which in the opinion of the Corporate Affairs Commission, is capable of misleading as to the nature or extent of its activities or is undesirable, offensive or otherwise contrary to public policy; or likely to mislead as to its nationality, race or religion of persons by whom the business is wholly or mainly owned or controlled is prohibited. See Amasike v. Registrar General CAC.
• d. Violating names: The use of a name which, in the opinion of the Corporate Affairs Commission, would violate any existing trade mark or business name registered in Nigeria is prohibited, unless the consent of the owner is obtained.
• e. Deceptive/Objectionable Names: The use of names which are in the opinion of the Commission, deceptive or objectionable in that it contains a reference or suggests association with any practice, institution, personage, foreign state or government, international organization or international brand or is otherwise unsuitable is prohibited.
• f. Undermining Names: The use of names which are capable of undermining public peace and national security is prohibited

The following are the reasons why a business name is suitable for a business:

• a. A business name is simple to register.
• b. Business names do not require the payment of stamp duties.
• c. Business names are easy to manage.
• d. Business names require less formality in registration.
• e. Enjoys registered business name except in litigation where the proprietors are sued in their own name.
• f. Business names are easy to dissolve.
• g. Business names are protected from parallel registration of the name either as corporate name, business name or trademark.
• h. When a business name is registered, it raises a rebuttable presumption of the existence of a partnership.

Sole proprietorships, partnership can register a business name. However, the following persons. However, the Registrar may refuse to register in the following circumstances:

• a. Minor: The Registrar may refuse to register an individual or firm if the age of the individual or partner in a firm is less than 18 years. Section 852 (3) CAMA, 2020.
• b. Fraudulent Trade Practices: The Registrar will not register a name if he has irrefutable evidence that the individual, firm or company applying has previously been involved in fraudulent trade malpractices in local or international trade. Section 852 (4) CAMA, 2020.

An application for the registration of a business name must be submitted to the Registrar within 28 days of the commencement of the business. Section 815(1) CAMA, 2020.

The conditions for registration of business names are that the business organization involved must be carrying on business in Nigeria under a business name and have a principal place of business in Nigeria and. Section 814(1) CAMA 2020.

According to Section 815 of the Companies and Allied matters Act, the following are the particulars that must be supplied to the Registrar for registration of business name:

• a. Particulars of then firm and proprietors.
• 1. The business name.
• 2. The general nature of the business.
• 3. The full postal address of the principal place of business and of each branch.
• 4. Full particulars of individuals including nationality, age and sex.
• 5. The corporate name and registered office of a corporation or company if any.
• 6. Date of commencement of the business. b. Two certified passport photographs of an individual or individual in a firm consisting only of individuals. Section 815(2) CAMA, 2020.
• c. Firm or individual acting as nominee or trustee. Section 815 (3) CAMA, 2020. d. Firm or individual acting as general agent in Nigeria, if it is a foreign concern. Section 815 (4) CAMA, 2020.

The items to be submitted to the Registrar for registration of a business name include the following:

• a. Application or statement in Form 1 or Form Individuals (2 copies).
• b. Two passport photographs of each individual.
• c. Tax clearance certificate of each individual or partner.
• d. Availability of Name Form
• e. Qualifying Certificate in the case of professional partnerships.

The effect of registration of a business name are as follows:

• a. Registration does not give legal personality to the business or association but merely apprises the public of the true identity of the persons who trade under the name. Domingo v. The Queen (1963) 1 All NLR 81.
• b. Registration gives priority to use of the name even against registered companies.
• c. Registration will not be construed as authorizing the use of the name if apart from such registration the use of the name would be prohibited.
• d. The registration of a business name is not proof of partnership but raises a rebuttable presumption of the existence of partnership. Henshaw v. Roberts, Nwankwo v. Nwankwo (1995) 5 SCJ 44.

The notification of any changes in the business name may be made by the business name to the Corporate Affairs Commission in writing signed in the same manner as the statement required on the registration and must be lodged at the office where registration was effected and must be lodged at the office where the registration of the business name was effected. Notifications of any change in the business name other than particulars of the age of an individual must be lodged with the Corporate Affairs Commission within 28 days after the change. Section 818 CAMA, 2020.

The effect of non-registration of business name is that the business is liable to penal sanctions which is manifest in the following:

• a. Bar to action to enforce partnership rights. Alonwole v. Bello (1972) 1 All NLR 41.
• b. Effect on contracts: By Section 821 of the Companies and Allied Matters Act, the contracts which are entered into by the business during default are unenforceable and not void, and application may be made to a High Court for relief from the disability. The High Court may grant relief if it is satisfied that the default was as a result of any of the following grounds:
• 1. That the default was accidental or due to inadvertence or some other sufficient cause.
• 2. That on other grounds, it is just and equitable to grant relief.

The annual return of a business name is to be delivered to the Corporate Affairs Commission not later than 30th June in each year except the calendar year in which the business name was registered. Section 822 CAMA, 2020.

The following are the reasons for which a business name may be removed from the Register of Business names:

• a. Notice by the proprietors within three months of cessation of business.
• b. At the instance of the Registrar where he has reasonable cause to believe that a business is no longer being carried on.

A business can only be brought to an end by dissolution as opposed to winding up in the case of companies. Upon cessation of its business, the business name is deemed dissolved and the name is removed from the Register of Business Names at the Corporate Affairs Commission. Section 819 CAMA, 2020.

A partnership is a voluntary association of two or more persons who jointly own and carry on a business for profit. A partnership is presumed to exist if the persons agree to share personality and the partners are personally liable for all the debts and liabilities of the partnership, without limitation. A partnership is limited to 20 persons. Where the number of persons in a partnership are more than 20 persons, it must be registered as a company or business name. However, some exceptions abound and these, according to Section 19(1) of the Companies and Allied Matters Act, are:

a. Where such an association or partnership is formed in pursuance of any other enactment in force in Nigeria. Section 19(1) CAMA, 2020. b. Where such an association is a co-operative society registered under the provisions of any enactment in force in Nigeria. Section 19(2) (a) CAMA, 2020. c. Where the partnership is a law firm. That is, where it is for the purpose of carrying on the practice of law by persons, each of whom is a legal practitioner. That is, each of the partners must be legal practitioners. Section 19(2) (b) (i) CAMA, 2020. d. Where such partnership is for the purpose of practicing as accountants by persons, each of whom is entitled by law to practice as an accountant. Section 19(2) (b) (ii) CAMA, 2020.

The types of partnership that exist in Corporate Law are the following:

• a. Limited Liability Partnership
• b. Limited Partnership
• c. General Partnership
• d. Venture Partnership which is for a particular project, after which it is dissolved - similar to a consortium of companies.

The following are the features of a partnership:

• a. There is a legal business which the parties have agreed to undertake. Section 3(1) Partnership Law, Lagos, Henshaw v. Roberts.
• b. The business comprises of two or more persons but not more than 20 persons except cooperative society, legal practitioners and accountants.
• c. The business is carried on in common by the partners. Section 3(1) Partnership Law, Lagos, Ugorji v. Uzoukwu.
• d. The business is profit-oriented and the partners agree to share the profits and losses. Section 3(1) Partnership Law, Lagos.
• e. Each partner is deemed to be an agent of the other partner or partners.
• f. Its formation is less formal.

The persons who can form a partnership are legal persons, whether natural or artificial, of full legal age and capacity who do not have any legal disability. The following are persons cannot form a partnership:

• a. An infant cannot form a partnership. Even though an infant can join in the registration of partnership name as business name under Part E of the Companies and Allied Matters Act, he cannot join in the formation of a partnership or in the partnership agreement as the general rule of contract.
• b. An insane person.
• c. A person who is bankrupt.
• d. A company in liquidation
• e. An unincorporated association because it does not have legal personality.
• f. An alien can only join in the formation of a partnership where such alien has obtained a business and resident permit from the immigration office.

A limited partnership is a business entity that consists of minimum of two persons and maximum of twenty persons of which at least one of the persons is a limited partner and the other persons are general partners.

The features of a limited partnership are as follows:

• a. The business of a limited partnership is carried out in common by the partners with the view to making profit.
• b. A limited partner in a limited partnership has limited partnership for the debts of the firm up to the amount of his investment.
• c. A limited partner does not take part in the management of the firm in a limited partnership.
• d. A general partner in a limited partnership has unlimited liability for the debts of the firm and oversees the running of the firm.

The documents required for the registration of a limited liability partnership are the following:

• a. Availability and reservation of name form.
• b. Form CAC/LP 01 which is application to register a limited partnership.
• c. Partnership agreement.
• d. Recent passport photographs of all partners.
• e. Copy of recognized and valid photo identification either data page of International Passport, Driver’s License, National Identity Card, Voter’s Card or Birth Certificate in the case of a minor.
• f. Evidence of payment of filing fees.

The persons who are qualified to be partners in a limited partnership are individuals provided such individuals are not of unsound mind or undischarged bankrupts and body corporates.

A partnership carrying on a business as a limited partnership must be registered as limited partnership failing which, it will be deemed to be general partnership. Section 797 CAMA, 2020.

Yes, a general partner in a limited partnership if such an arrangement is agreed upon by the other partners and a notice of the arrangement or transaction specifying the change from general partner to limited partner is filed with the Corporate Affairs Commission within five days of the change. Section 801 CAMA, 2020.

A limited liability partnership is a business entity that consist of minimum of two partners and no maximum. It is a body corporate with legal personality separate from its members and sue and be sued in its corporate name. It has perpetual succession and is not affected by the demise, retirement, insolvency or withdrawal of any of the partners. It combines characteristics of partnerships and corporations, particularly in the area of limited liability because all the partners have limited liability. That is, in event where the partnership is sued or indebted to some people, the liability of its partners would be limited only to the amount contributed by each partner during the formation of the partnership. Section 746 and 748 CAMA, 2020.

Individuals or body corporates are qualified to be partners in a limited liability partnership provided the individual is not of unsound mind or an undischarged bankrupt. Section 747 CAMA, 2020.

A designated partner are partners of limited partnership with additional responsibility from other partners which includes compliance of the limited partnership with the provisions of the Companies and Allied Matters Act like the filing of any returns, statements or other reports under the Companies and allied Matters Act. Every limited liability partnership must have at least two designated partners.

The following are the effects of a limited liability partnership according to Section 757 of the Companies and Allied Matters Act:

• a. The certificate of registration shall be prima facie evidence that the limited liability partnership came into existence on the date of the registration.
• b. The limited liability partnership may acquire, own, hold and develop or dispose of property, whether movable or immovable, tangible or intangible.
• c. The limited partnership if it decides to have a common seal may have one.
• d. The limited liability partnership may do and suffer other acts and things as bodies corporate may lawfully do and suffer.

The following are the ways which partnership interest cease in a limited liability partnership:

• a. By agreement with the other partners of the firm.
• b. By giving 30 days’ notice in writing of his intention to resign as a partner of the firm to the other partners of the firm in the absence of agreement.
• c. Upon the death of the partner.
• d. When a partner is declared to be of unsound mind by a competent court.
• e. Where a partner is declared to be of unsound mind by a competent court.
• f. Where a partner has applied to be adjudged or declared or declared as an insolvent.
• g. Upon dissolution of the partnership.

Unless otherwise provided in the limited liability partnership agreement, the rights of a partner to a share of the profits and losses of a limited liability partnership and to receive distributions in accordance with the limited liability partnership agreement are transferable either wholly or in part. Section 774 CAMA, 2020.

The persons who may apply for investigation of limited liability partnership are:

• a. The court by its order.
• b. Corporate Affairs Commission on its own motion.
• c. At least one-fifth of the total number of partners.
• d. The limited liability partnership itself.

The grounds for investigation of a limited liability partnership are the following:

• a. Where the Commission is of the opinion that the business of the limited liability partnership is being or has been conducted with an intent to defraud its creditors, partners or any other wise for a fraudulent or unlawful purpose.
• b. Where the Commission is of the view that the business of the limited liability partnership is being or has been conducted in a manner oppressive or unfairly prejudicial to some or any of its partners, or that the limited partnership was formed for any fraudulent or unlawful purpose.
• c. Where the Commission believes that the affairs of the limited liability partnership are not being conducted in line with the provisions of the Companies and Allied Matters Act.
• d. On receipt of a report of the Commission or any other investigating or regulatory agency, the Commission is of the opinion that there are sufficient reasons to show that the affairs of the partnership ought to be investigated.

At the end of the investigation, the following persons are those entitled to receive an the Inspector’s report:

• a. The limited liability partnership which is sent to its registered office.
• b. Any other entity or person dealt with or related to the report.
• c. On request and on payment of the prescribed fee, the Commission may if it deems fit, furnish a copy of the report to any person or entity related to or affected by the report. Section 781 CAMA, 2020.

The uses of the inspector’s report are as follows:

• a. Corporate Affairs Commission may institute civil proceedings in the name and on behalf of the limited liability partnership on the basis of the inspector’s report, where it appears to the Commission that civil proceedings ought to be brought by the partnership in the public interest.
• b. Where from the inspector’s report a person appears to have been convicted of an offence for which he is criminally liable, the report shall be referred to the Attorney General of the Federation. Where the Attorney General of the Federation considers that the case referred to him is one in which a prosecution ought to be instituted, he shall direct accordingly.
• c. Where from the inspector’s report, it appears to the Commission that proceedings ought, in the public interest, be brought by the partnership dealt with by the inspector’s report for the recovery of damages, in respect of fraud, misfeasance or other misconduct in connection with the promotion or formation of the partnership or the management of its affairs, or for the recovery of any property of the partnership which has been misapplied or wrongfully retained, it may refer the case to the Attorney General of the Federation for his opinion as to the bringing of proceedings for that purpose in the name of the partnership. If proceedings are brought, all past and present designated partners and partners of the partnership, other than the defendants in the proceedings, must give to the Attorney General of the Federation all assistance in connection with the proceedings.
• d. Where it appears to the Commission from the inspector’s report that it is desirable in the public interest that the partnership be wound up, the Commission may present a petition for it to be wound up if the court.
• e. A copy of the inspector’s report authenticated in such manner, as may be prescribed shall be admissible in any legal proceeding as evidence in relation to any matter contained in the report.
• f. Where it appears to the Commission from the inspector’s report that it is desirable in the public interest that the partnership be wound up, the Commission may present a petition for it to be wound up if the court deems it just and equitable to do so, unless the partnership is already wound up by the court.
• g. A copy of the inspector’s report authenticated in such manner, as may be prescribed shall be admissible in any legal proceeding as evidence in relation to any matter contained in the report.

Yes, the Corporate Law Practice in Nigeria allows for foreign limited liability partnership. However, any foreign limited liability partnership coming into Nigeria must first register a limited liability partnership in Nigeria with the Corporate Affairs Commission. Section 788(1) CAMA, 2020. Certain foreign limited liability partnerships are exempted under Section 788(2) CAMA, 2020 and Rule 22 of Companies Regulation, 2020.

According to Section 790 of the Companies and Allied Matters Act, the circumstances that will warrant the winding up of a partnership by the court is as follows:

• a. Where all the partners decide that the limited liability partnership be so wound up by the court.
• b. Where for a period of more than six months, the number of partners of the partnership falls below two.
• c. Where the limited liability company is unable to pay its debts.
• d. Where the partnership has acted against the interests of the sovereignty and integrity of Nigeria or against her security or public order.
• e. Where the partnership has made a default in filing with the Corporate Affairs Commission, the statement of account and solvency or annual return for any 10 consecutive financial years.
• f. Where the court is of the opinion that it is just and equitable that the limited liability partnership be wound up.

Where a partner becomes a person with significant control over a limited liability partnership, he shall within 7 days of becoming such a person, indicate to the limited liability partnership in writing the particulars of such control. Upon a limited partnership receiving or being in possession of the information that a partner has become a person with significant control, the partnership shall within 1 month from the receipt of the information or any change therein, notify Corporate Affairs Commission of that a fact. Section 791 CAMA, 2020.