TYPES OF PARTNERSHIP

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TYPES OF PARTNERSHIP:-

          Basically there three types of partnership. General Partnership, Limited Liability Partnership (LLP) and Based on Partnership Registration Status.

·         GENERAL PARTNERSHIP:-

In this type of partnership, each partner has right to take decision about the working and management of the firm. The partner’s liability is unlimited and in case of a financial error / loss incurred by the act of a single partner the personal assets of all the partners can be taken away to pay back the debts and creditors’ claims. General partnership is bifurcated into two categories.

(1) Particular Partnership:-

     The agreement between the partners provides that the partnership is formed for a certain fixed period of time, it is called as a partnership for a fixed period. When such specified period is completed, the partnership automatically comes to an end. However, if the partners continue to carry on the business even after expiry of such period, the partnership becomes partnership at will.

     The agreement between the partners provides that the partnership is formed for a particular venture or undertaking, it is called as a partnership for a particular venture or undertaking. Where such venture or undertaking is completed, the partnership automatically comes for an end.

(2) Partnership at will:-

     A partnership is said to be partnership at will if, it is not a partnership for a fixed period AND it is not a partnership for a particular venture or undertaking. No time or event is satisfied as to when the partnership shall come to an end. A partnership at will may be dissolved by any partner at his will at any time.

·         LIMITED LIABILITY PARTNERSHIP (LLP):-

A limited partnership unlike general partnership is a corporate form of business organization. Here, the liabilities are limited to each partner according to their agreed contribution to the business. The personal property of a partner cannot be attached to pay back the firms debts. This hybrid organization is governed under the Limited Liability Partnership Act, 2008 and not under Partnership Act.

·         BASED ON PARTNERSHIP REGISTRATION STATUS:-

The Partnership Act does not mandate the registration of partnership firm. Both, registered and unregistered firms are valid and recognized under law. The Partnership Firm is to be registered with the Registrar of Firm having jurisdiction over the place of business of the Firm. An unregistered firm is established by execution of an agreement by the partners. The unregistered partnership firm allows the Partners to carry on the business in manner stated and provided in the agreement.

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http://knowpartnership.blogspot.com/2020/07/types-of-partners.html