Under the
Companies and Allied Matters Act, a Business Name may be registered either as a
Partnership or as a Sole Proprietorship.
Features and
Suitability of Partnership
·
The parties have agreed to undertake a business
·
The business should be carried out in common by the
partners
·
The business must be aimed at making and sharing
profit
·
Membership is limited to between 2 to 20 except for
law and accountancy firms and cooperative society registered by law
·
Each partner is deemed an agent of the co-partners
(members carry on the business in common). Thus, mere sharing of profit in a
venture does not automatically make it a partnership
·
Partnership is different from co-ownership of business
·
Less capital outlay
·
Less formalities for registration
·
It could be registered as a Business Name under Part B
CAMA; although Lagos State has implemented Limited Partnership Law
Suitability of a Partnership
i.
Where there is need not to invite the public to buy
shares
ii.
Where there is need not to engage in business of
Banking & Insurance
iii.
Where there is no need for perpetual succession
iv.
Where there is need for Risk sharing
v.
Where there is need for Flexibility of operations
Features of a Sole
Proprietorship
·
The sole proprietor takes all the profit and bears all
the risk of the business.
·
The death of the sole trader may result to the death
of the business if there is no express agreement to continue the business.
·
A sole trader need not register his business if he
carried on the business under his surname, his surname and the initials of his
forename or under his full name
·
Where a sole proprietor desires to carry on business
with a different name other than those aforementioned, he will need to register
the Business Name under Part B CAMA
Suitability of a Sole Proprietorship
i.
Where there
is need not to accommodate large scale investments
ii.
Where there
is need not to sell shares to the public
iii.
Where there
is need not to engage in the business of banking, insurance, mortgage, private
guards, collective investment trusteeship, collective investment management and
collective investment custodian.
iv.
Where there
is need for quick decision making
© Onyekachi Duru Esq and www.legalemperors.com, 2016. (All Rights Reserved) Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Onyekachi Duru Esq and www.legalemperors.com with appropriate and specific direction to the original content.
© Onyekachi Duru Esq and www.legalemperors.com, 2016. (All Rights Reserved) Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Onyekachi Duru Esq and www.legalemperors.com with appropriate and specific direction to the original content.