Reasons why it is more advisable to form a Limited Liability Partnership

a. tax benefits- as with a general partnership, the profits and losses in a limited partnership flow through the business to the partners, all of whom are taxed on their personal income tax returns. The difference is that the limited partners in the relationship get to share in the profits and losses, but they do not have to participate in the business itself.

b. liability limits-a limited partner’s liability for the partnership’s debt is limited to the amount of money or property that individual partner contributed to the partnership. This is not true of the general partnership, where any money or property contributed becomes an asset of all the partners.

c. the general partners take charge- in a limited partnership, the general partners deal with the daily operations and responsibilities and don’t need to consult the limited partners for most business decisions.

d. no turnover issues- limited partners can be replaced or leave without dissolving the limited partnership.

e. less paperwork- creating a limited partnership, like a general partnership, requires less paperwork than forming a corporation.

Transmission of Shares in Succession Law

Transmission refers to the automatic transfer of ownership of a shareholder’s share by operation of law upon the said shareholder’s demise or bankruptcy. Transmission of shares safeguards the continuity of membership in a company which fortifies the sustainability of the day-to-day running of a company as it mitigates the possibility of disruptive withdrawal of shareholders.

The Law

- Section 497 of the Companies Act provides that a company may only register a transfer of shares if a proper document of transfer(transfer of shares form) has been delivered to it, failure to which the said transfer is rendered void.

- The succession of shares of a deceased shareholder is regulated by the Law of Succession Act Cap 160 and the Companies Act No. 17 of 2015.

Documents required for Transmission of Shares.

The following documents should be lodged at the Companies registry in order to effect the transfer of shares by transmission to a beneficiary: -

• Certified copy of the Death certificate of the deceased shareholder;
• Certified copy of Identification card or surrender form of the deceased shareholder.
• Certified copy of the grant of letters of administration in the event the shareholder died intestate or certified copy grant of probate in the event the shareholder died testate;
• Certified copy of Certificate of confirmation of Grant from the High Court.
• Certified copy of the Identity card of the personal representative and/or administrator;
• Certified copy of the Identity card of the Beneficiary;
• Original share certificates of the subject companies; and
• Duly filled transfer of shares form.