Kinds of Partnership:
Partnership firms are of two type’s viz., General Partnership and Limited Partnership. These are explained as under.
1. General Partnership:
In this case the liability of all the partners is unlimited. It means in order to meet the creditor’s claims even the private property of the partners can also be used.
Under General Partnership, every partner has the right to take part in the management of the business of the firm. In India all the partnership firms are formed in this form.
General Partnership can be further divided into two types i.e. (i) Partnership at Will, and (ii) Particular Partnership. These are explained as under:
(i) Partnership at will:
When a partnership firm is constituted for unspecified period, it is known as Partnership at will. The business of such a firm is transacted for any length of time depending upon the will of the partners.
It can be dissolved by any partner by giving a notice indicating that he wants to withdraw his interest from the firm.
(ii) Particular partnership:
As the very name suggests, this type of partnership is formed for conducting business of specific or temporary nature. The partnership comes to an end either on the accomplishment of the task for which the partnership was undertaken or on the expiry of the time period for which the firm was constituted.
Partnership to construct Mahanadi Bride. The movement bridge is complete partnership leased then and there.
2. Limited Partnership:
Under this type of partnership some of the partners have unlimited liability while others have limited liability up to their individual share in the capital of the firm.
Such types of partnerships are not permissible in India, but they are quite common in U.S.A. and England. The partners having limited liability in the firm is known as special partner and others having unlimited liability is called general partner.