Types of Partners and Partnership
Types of Partners
- Active partners: They provide capital and play an active part in business. These partners have unlimited liability.
- Inactive/Sleeping partner: They provide capital to business and share profit and loss to firm but do not take part in management and day to day activities.
- Nominal partners: They act only as a partner and give their name to the firm. They do not take part in management and day to day activities also don’t share profit and loss. The Nominal partner is liable for the debt/liability if the partners or firm couldn’t repay the credit taken with the nominal name.
- Secret partner: These partners are similar to general partner. They have involvement in every aspect of business. Their membership is kept secret to the outside world. They can take part in the management
- Partner in profit only: They share profit only but no loss is shared. They are generally inactive but have relation in money and goodwill.
- Minor partners: They do not enter into contract and can’t be made partner in real sense but if there is consent of all partners then their partnership can be taken into consideration. They have right to inspect book of account and share the proportion of profit. They are limited partner as they don’t need to bear any additional loss.
- Retrieval partners: Even if this partner leaves the firm other partners continue to operate business. They are liable for all debtor and share profit too. But they do not take part in management and day to day activities.
- Incoming partners:
- Outgoing Partners:
- Quasi Partners:
- Active Partners:
- Limited Partners:
- Sub Partners:
If there is consent of all partners then their partnership can be taken into consideration. They aren’t held liable for debt before approval of all partners.
Types of partnership
- General partnership: Partners have equal rights and all of them participate in management. It is jointly involved to operate the business. There are two types of general partnership.
i. Partnership at will: It continues up to the time of partner. It is dissolved when all partners want dissolution. They can leave the firm at will. There is no fixation of duration of firm
ii. Particular partnership: It is established for definite workers at definite period. When task is finished partnership is dissolved in particular partnership.
- For Particula time period.
- For Particular Purpose.
- Limited partnership: A limited partnership is that type of partnership in which there is one or more partners having limited liability. The liability of limited partners is limited to their capital invested. They can’t participate in the managerial activities but they can advice. They also don’t have right to make decision and close the firm
- Partnership in Profit: