Kinds of Partners:
The following are the various kinds of partners. 1. General partners 2. Special partners3. Others partners
1. General Partners:
Partners who take active part ion the business of the firm are known, as general partners. The liability of such partners is unlimited in the firm. These partners are of two types.
Image Source: timesofrefreshing.us/picts/partnerships5.jpg
(a) Active Partner:
ADVERTISEMENTS:
A general partner who takes active part in the day-to-day affairs of the business is known as Active Partner. It is also termed as working or managing partner.
(b) Dormant or Sleeping partner:
He does not take any part in day-to-day affairs of the business. He contributes his capital and shares the profits and losses of the business. He is bound by the acts of the other partners. He does not directing involved in the day to day activity of the business.
2. Special Partners:
These partners are found in limited partnership only. They do not have unlimited liability. Their liability is limited up to the amount of capital invested by them. They do not take part in the management of the affairs of the business, but they have the right to inspect the books of the firm.
3. Other Type of Partners:
ADVERTISEMENTS:
These are as follows:
(a) Nominal Partner:
He is that partner who neither invests capital nor does participate in profits and losses of the film as partner. He lends his name to enhance the goodwill of the concern.
He does not have any contractual relationship with other partners. But he is equally responsible to the third parties for the acts of the firm.
ADVERTISEMENTS:
(b) Partners in profits only:
He is that partner who shares the profit of the firm, but is not liable for losses. But he is equally liable like other partners to the third parties for the acts of the firm. He is not allowed to take part in day to day management of the business.
(c) Partner by estoppels’ or Holding out:
Indian Partnership Act, 1932 defines such a partner as a person, who by words, written or spoken represents himself or knowingly permits himself to be represented as a partner.
Actually he is not a partner, but deemed to be partner in the firm by his activity. He is held liable to other who had advanced money to the firm on such representation. He has no right as a partner in the firm.
(d) Minor partner:
The minor partner is a partner who has not completed the age of 18 years according to Indian law and 21 years under English law. He has no contractual capacity and as such he can never become a partner in a firm.
He can be admitted to the benefits of the firm with the consent of all the partners. He is entitled to share the profits and property of the firm as agreed among the partners.
He can’t inspect the books of accounts of the firm and take a copy of the same. His liability is limited to the extent of his share in the profits and property of the firm.
After the attainment of the age of majority, a minor has to clearly notify his intention to continue in the firm or not within 6 months of his attaining the age of majority. If he fails to give notice within the specified time, he is deemed to become partner of the firm.
(e) Secret partner:
He is otherwise active partner in firm but his membership is kept secret to outsiders including the creditors of the firm. His liability is unlimited. He takes active part in day to day affairs of the business. His position is in between active and sleeping partners.