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Explain the types of partners |
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Answer» 1st active partnership Types of Partners in a Partnership\tWorking Partner\tA Working Partner is one who contributes capital to the\xa0business\xa0and takes active part in its management. Hence, he is called active partner.\tSleeping Partner\tA Sleeping Partner is one who contributes only capital to the business, but does not take part in its management. He is also called dormant partner or financing partner.\tNominal Partner\tA Nominal Partner does not contribute capital. Neither does he take active part in the management. His contribution in a partnership is limited to allowing the other partners to make use of his name.\tPartner by Estoppel\tPartner by Estoppel is not a partner of the firm but by his words and conduct he leads the outsiders to believe that he is also a partner of the firm. Usually this arises, when the outgoing partner fails to give notice about his retirement.\tLimited Partner\tIn foreign countries like U.K., the law of the land permits the admission of partners with limited liability. But in India, no one can be a limited partner. There is only one exception. The liability of a minor admitted for the benefits of partnership is limited to the extent of his capital contribution.\tSecret Partner\tA Secret Partner is actually a partner of the firm. But he does not hold out to the public as a partner of the firm but keeps his existence as secret. His liability is also unlimited.\tPartner by Holding Out\tThough a Partner by Holding Out is not a partner, he knowingly permits himself to be a partner of the firm by his activities.\tSub – Partner\tA Sub-Partner has no direct contact with the firm. He is only next to a partner.\tPartner in Profit\tA Partner in Profit becomes a partner whenever the firm earns profit. His liability is also unlimited. |
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