Saturday, 18 July 2020

TYPES OF PARTNERS

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TYPES OF PARTNERS:-

          The partnership is formed with its partners and their roles and responsibility may also be changed. Based on their participation and roles in the firm, below are the types of partners in Partnership Firm.

·          ·         ACTUAL / ACTIVE / WORKING PARTNER:

 A partner who attends to the affairs of the firm is called as an active or actual partner. He is actively involved in the management and other important functional aspects of the partnership firm. He plays an active role in the conduct of business of the firm. An active partner is liable to all the third parties for acts of the firm. Actual partner also known as active or working partner. In case the active partner chooses to retire, he must give a public notice of his retirement. Subject to clause in partnership deed, the active partner can withdraw remuneration from the firm.

 ·         DORMANT OR SLEEPING PARTNERS:

 A partner who does not attend to the affairs of the firm is called as a sleeping partner or a dormant partner. He does not participate in the conduct of business of the firm. His identity is not disclosed to the outsiders and persons dealing with the firm. He is also liable to all the third parties for acts of the firm. He is not required to give public notice at the time of his retirement.

 ·         NOMINAL PARTNER:

A partner is called as a nominal partner if, (a) he does not attend to the affairs of the firm, (b) he supplies only nominal capital to the firm and (c) he shares only nominal profits from the firm. The purpose of admitting a partner as a nominal partner is to use the high status and credibility of such person for the purpose of promoting the business of the firm. Thus, a nominal partner lends his name to the firm. He has no real interest in the business of the firm. He is also liable to all the third parties for acts of the firm.

·          ·         PARTNER IN PROFITS ONLY:

 A partner, who is entitled to share the profits but is not liable to share the losses, is called as a partner in profits only. A third party is empowered to recover the whole of the amount due against the firm even from a “partner in profits only”.

 ·           SUB-PARTNER:

 A ‘sub-partner’ is NOT a partner in the firm. When a partner agrees that some outsider shall be entitled to the whole or some part of his share of profits and property, such outsider is called as a sub-partner. He has no rights of a partner. He is not liable for the acts of the firm. He has no right against the firm. His only right is to claim the share of profits and property from the contracting partner only.

 ·         MINOR AS A PARTNER:

A minor cannot become a partner in a firm since he cannot enter into a contract. However, a minor can be admitted to the benefits of a partnership.

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TYPES OF PARTNERS

To know about partnership and types of partnership, follow below links; http://knowpartnership.blogspot.com/2020/06/partnership-overview.htm...