Introducing Limited Liability Partnerships/Llps in to the Ethiopian Legal System

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2018-01

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Addis Ababa University

Abstract

Partnerships and companies are the most common forms of business organizations operating in Ethiopia. In partnerships, the problem of unlimited liability, mutual agency and lack of perpetual succession are the main limitations. Whereas, in companies forms of business organizations enormous compliances and administrative requirement coupled with high capital requirement act as deterrents. The deficiencies in the two categories of business organizations i.e., partnerships and companies trigger the need for a new hybrid form of business organization with the view to bring emerging entrepreneurs to the same level with the international competitors and enable new entrants establish businesses in Ethiopia. A critical shortcoming of the past and present regimes in Ethiopia is an inherent legal gap between partnerships and companies registered under the aged Commercial Code. In the absence of suitable forms of business vehicles, the number of unincorporated businesses is increasing. In consequence, there exists a disparity between the rates of incorporation vis-à-vis growth in businesses. With increasing growth in the Ethiopia’s commercial landscape, there exists a need to introduce a new business entity form, which has the flexibility of a partnership alongside maintaining the benefits of a company. The purpose of this paper is to analyze those jurisdictions which have adopted LLPs and examine the manner in which LLPs are to be introduced in to Ethiopia’s corporate system. Consequently, the general concept of LLP is scrutinized and evaluated to ensure its prospective introduction in to the Ethiopian legal system.

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Llps In to the Ethiopian Legal System

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