Question

Write short answer of the following.
State the types of partners.

Answer 1

Introduction: - When a person who deals with the firm, must know the partners of the firm and to what extent each partner is liable. Some partners in a partnership take active part in firm and they are also directly related with the firm. They invest money in the firm and have a share in its profits and loss. Some partners who do not have full interest in the partnership firm. It is compulsory to make investment in the business, so they don't get any share in the profit.

Following are the types of partners:

1. Active partners/ Actual Partners: -he partners who take active participation in the day to day work of the firm or take active part in the conduct of the business are called Active partners.  They contribute money in the firm and they have a share in its profits or loss. They have unlimited liability.
2. Sleeping Partners or Dormant Partners: -Sleeping or dormant partners are those who do not take active part in the conduct of business. They have invested money in the business and have share in profits and loss. They do not give public notice of their retirement. They have unlimited liability.

 

3.  Nominal Partners: -They lend their names to the firm without having any real interest in the firm. They neither contribute to the capital nor share the profits or take part in the conduct of the business of the firm. The firm make them partners to join form, to use personal goodwill
   4. Minor Partners: - According to the Indian contract Act, 1872, a person below 18 years is called minor. But according to the provision in the Indian Partnership Act, 1932, a minor can be a partner in the profit of the firm if all the other partners give their consent. Minor has limited liability and is not liable for losses.

    

   5. Partners in profits only: - He can share the profits of the firm. But his liability is unlimited like other partners. He must give public notice of his retirement. Such partners have no right to take part in the daily work.

    

   6. Limited Partners: -A person whose liability of the firm A person whose liability of the firm is limited to the extent of his investment is called limited partner. He has no right to take part in day to day work. But such a partnership must have at least one partner having unlimited liability.

    

   7. Partner by Holding out: -A person who is not a partner in the firm but he represents himself to be a partner by word spoken or written or by his conduct is called a partner by holding out.

    

   
   
   8. Secret Partner: - When the relation of the partner with the firm is unknown to the general public is known as secret partner. Secret partners have all the features like other partners. His liability is unlimited.

Answer 2

The following are the types of partners in a partnership firm:
i. Active partners: They contribute capital to the business and share profits and losses and are actively involved in the working of the business. They have unlimited liability, which means that their personal property can be used to pay off the debts of the business.
ii. Sleeping partners: Although they contribute capital to the business and share profits and losses, they are not involved in the working of the business. Their liability is unlimited.
iii. Nominal partners: They only lend their names to the business. They neither contribute any capital to the business nor share profits or losses of the business.
iv. Minor partners: They are below 18 years of age and are made partners in the business with the mutual consent of all partners. They share only profits and have no liability for the losses of the business.
v. Partners in profits only: They share only profits of the business and do not take part in the working of the business. The liability of these partners is unlimited.
vi. Limited partners: The liability of these partners is limited to the amount of their investment in the business. They do not take part in the management of the business.
vii. Partners by holding out: They are not the partners of the firm; they represent themselves as partners by their action or conduct. They neither contribute any capital to the business nor participate actively in the operations of the business. They do not share profits or losses of the business.
viii. Secret partners: Their association with the business is unknown to the general public. Such partners do not contribute any capital but have participation rights in the management of the business. They are entitled to the profits and losses of the business.