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The short answer
A partnership agreement records what each partner puts in, how profits and losses are split, what each may draw, how decisions are made and how a partner leaves. In Nigeria, partners in an ordinary (general) partnership have unlimited personal liability, and if you trade under any name other than your own true names you must register it with the CAC as a business name.
Two friends open a pharmacy, three siblings run a logistics business, four colleagues start a consultancy. Most begin on trust and a handshake. Disputes start later, usually over money taken out, a partner who stops working, or what happens when someone wants to leave. A written agreement settles those questions while everyone is still on good terms.
Registration: when the CAC comes in
Partnerships in Nigeria take three forms under the Companies and Allied Matters Act 2020 (CAMA): a general partnership, a limited partnership (LP) and a limited liability partnership (LLP). The key points:
- Business name. Under CAMA, trading under a name other than your registered or true name is an offence (section 863, as summarised by Templars on the CAC’s April 2025 notice). Individuals trading under their own true names do not need to register (section 814). If your partnership trades as ‘Grace & Tunde Logistics’ or any other business name, register it.
- General partnership. Partners are personally and jointly liable for the firm’s debts, without limit. Registration needs proposed names, addresses, partners’ details, IDs and photographs.
- LP. At least one general and one limited partner, no more than 20 partners; a limited partner who joins in management loses protection.
- LLP. A separate legal entity, at least two partners, at least one a Nigerian citizen; liability limited to what each invests. Registration requires an executed partnership agreement.
The clauses that prevent disputes
Capital
Record what each partner contributes in cash, equipment or premises, the agreed value of non-cash items, and whether capital earns interest. Say whether further capital can be called and what happens if a partner cannot pay.
Profit and loss shares
Shares need not match capital. A partner who works full time may take a larger share or a fixed salary before profits are split. Write the ratio down, and state that losses are shared in the same ratio unless agreed otherwise.
Drawings
Drawings are advances against each partner’s share of profit. Set a monthly limit, a date, and how over-drawings are repaid at year end.
Worked example (illustrative figures)
| Partner A | Partner B | Total | |
|---|---|---|---|
| Capital contributed | ₦3,000,000 | ₦2,000,000 | ₦5,000,000 |
| Agreed profit share | 60% | 40% | 100% |
| Year’s net profit shared | ₦2,400,000 | ₦1,600,000 | ₦4,000,000 |
| Drawings taken (₦150,000 a month) | ₦1,800,000 | ₦1,800,000 | ₦3,600,000 |
| Balance due to (from) partner | ₦600,000 | (₦200,000) | ₦400,000 |
Partner B drew ₦200,000 more than their profit share. The agreement should say whether that is repaid in cash, deducted from next year, or treated as a loan.
Template: partnership agreement (2 to 4 partners)
- PARTNERSHIP AGREEMENT dated [date] between [Partner 1 name, address], [Partner 2], [Partner 3], [Partner 4] (the Partners).
- 1. Name and business. The Partners carry on business as [business name], registered with the CAC as [BN number], dealing in [business], from [address].
- 2. Start and term. The partnership began on [date] and continues until ended under clause 11.
- 3. Capital. Each Partner contributes: [Partner 1: ₦ / assets]; [Partner 2: ₦ / assets]. Capital earns [no interest / interest at an agreed rate]. Further capital requires [unanimous] agreement.
- 4. Profits and losses are shared [ratio], after paying [Partner X] a monthly sum of ₦[amount] for full-time management.
- 5. Drawings. Each Partner may draw up to ₦[amount] a month. Excess drawings are settled within [60] days of the annual accounts.
- 6. Bank account. All partnership money goes into the partnership account in the business name. Payments above ₦[amount] need [two] Partners’ approval.
- 7. Duties. Each Partner will work [full time / hours] in the business, act in good faith, account for any profit from partnership business, and not run a competing business.
- 8. Decisions. Day-to-day decisions by any Partner. By majority: hiring, contracts above ₦[amount]. Unanimous: new partners, borrowing, selling the business, changing this agreement.
- 9. Accounts. Books kept at [address]; annual accounts prepared by [date]; each Partner may inspect at any time.
- 10. Leaving. A Partner may retire on [three] months’ written notice. The others may buy that Partner’s share at the value shown in the last accounts [or a valuation by an agreed accountant], paid over [12] months.
- 11. Death, incapacity or expulsion. [Set out process and payment to the estate.] Expulsion only for serious breach, by unanimous vote of the other Partners after written notice and a chance to respond.
- 12. Disputes. Partners will first meet within 14 days; then mediation; then [arbitration / the courts of State].
- Signed by each Partner and witnessed: ____
Before you sign
- Agree the profit ratio and drawings openly; do not leave them for later.
- Check whether an LLP would better protect personal assets.
- Open a business account in the registered name, with the mandate matching clause 6.
- Set up a simple record of capital and drawings per partner.
- Revisit the agreement when a partner’s role changes.
For the money side, see our guide to signatories and mandates and the companion MoU template for the talks before you sign.
Where Pryme fits
A Pryme Business Account lets partners keep separate accounts for operations and partner drawings, and the Finance agent prepares records of each partner’s drawings for review; payments above the ceiling you set need a person’s approval.
Questions people ask
Do I need to register a partnership with CAC in Nigeria?
If you trade under any name other than the partners’ own true names, yes: register it as a business name. LPs and LLPs must be registered with the CAC to exist.
How are profits shared in a partnership without an agreement?
Default rules depend on the partnership law that applies in your state and may not match what partners expect. A written agreement avoids relying on them.
Is a partner liable for the other partner’s debts?
In a general partnership, yes: partners have unlimited liability and are responsible for each other’s acts in the business. An LLP limits liability to what each partner invests.
What is the maximum number of partners in Nigeria?
A limited partnership cannot exceed 20 partners under CAMA 2020, per the CAC guidance summarised by Mondaq. Check current CAC rules for other types.
Sources
- Partnerships in Nigeria: guidelines for registration (Mondaq, Jun 2022) · accessed Oct 2026
- CAC notice on trading under an unregistered name (Templars, May 2025) · accessed Oct 2026
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