By Olasunkanmi Akoni & Monsur Olowopejo
THE Lagos State Government has promulgated a law to encourage individuals doing business in the state to form partnerships, saying such partnerships would be more beneficial to them than being sole proprietors.
The stateâ€™s Attorney-General and Commissioner for Justice, Mr. Olasupo Sasore, at media briefing yesterday in Alausa, Ikeja, who spoke of the existence of the law, said it regulates the business relationship of partners, adding that with the law in place, any business relationship could be formed into different number of vehicles.
According to the commissioner, the Partnership Law has been in existence as early as 1958 when it was realised by the government that there was need to regulate the partnership business which has been in Lagos for a long time.
The need to regulate the business, the Attorney General said, arose as a consequence of the state governmentâ€™s desire to give to the public the benefits that the business partnership could bring to them.
â€œThe first Partnership Law appeared in 1958 to regulate both the relationship between partners themselves and the relationship between the partners and members of the public when they engage in business,â€ he said.
The Attorney General said in 2003, Lagos State Government created the Limited Partnership phenomenon where members of a business entity could engage in business and one of them could limit his relationship with the business while the other ran the business full time, adding: â€œWe believe this entity was very useful for small and medium scale business peopleâ€
â€œWe believe there was great need for advocacy and enlightenment in teaching our people that you could get more benefits from doing business with more people than being sole proprietor and, therefore, perhaps bring about more income that they need to meet their daily challengesâ€.
The commissioner, who said there is no tax attached to the law, said one of the benefits of the law was that â€œit allows our people to do business as partners and enjoy some of the protections corporate entities enjoy and not pay 40 per cent taxâ€.
According to the Commissioner:â€œThe Law will reduce tax and engage our people in business entities while they continue to pay tax as individuals and as if they are trading as sole proprietors, the same rate of tax a sole administrator will payâ€, adding that under the law the individual does business as partner without attracting corporate tax.
He said there is no conflict between the Law and the Companies and Allied Matters Act adding, â€˜In Nigeria today, Corporate Affairs Commission and the Companies and Allied Matters Act do not control partnership in anyway whatsoever, pointing out that the Partnership Law is not a new law. â€œWe are amending an old lawâ€, he said.
The interaction with Government House Correspondents which afforded the Honourable Commissioner the opportunity to explain various aspects of the law and during which copies were distributed to newsmen, was also witnessed by the Assistant Director Commercial Law in the Ministry of Justice, Ms Titilayo Shittabay and the Senior Special Assistant on Media to the Governor, Mr. Hakeem Bello.