Question

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Explain All types of Partners :-

1) Working partner
2) Sleeping partner
3) Secret partner
4) Nominal partner
5) Partner by estoppel
6) Partner by holding out

Explain with examples ..

Answer 1

1. Working Partner
A Working Partner is one who contributes capital to the business and takes active part in its management. Hence, he is called active partner.

2. Sleeping Partner
A Sleeping Partner is one who contributes only capital to the business, but does not take part in its management. He is also called dormant partner or financing partner.

3. Nominal Partner
A Nominal Partner does not contribute capital. Neither does he take active part in the management. His contribution in a partnership is limited to allowing the other partners to make use of his name.

4. Partner by Estoppel
Partner by Estoppel is not a partner of the firm but by his words and conduct he leads the outsiders to believe that he is also a partner of the firm. Usually this arises, when the outgoing partner fails to give notice about his retirement.

5. Secret Partner
A Secret Partner is actually a partner of the firm. But he does not hold out to the public as a partner of the firm but keeps his existence as secret. His liability is also unlimited.

6. Partner by Holding Out
Though a Partner by Holding Out is not a partner, he knowingly permits himself to be a partner of the firm by his activities.

Answer 2

1)and 2)Working and Sleeping Partners. In many businesses, you will see that the partner that is working is called working partner. While the other partner is sleeping or he is silent so he is called sleeping partner. ... The working partner manages the business and hence get paid in the form of salary or remuneration for it. 3)a partner whose membership in a partnership is kept secret from the public. 4) A nominal partner is a partner in the business has no actual interest in the trade or its profits. ... Generally, a nominal partner is a well known, well connected individual whose name lends credibility and recognition to the firm. A nominal partner is paid a fee for this service. 5)Legally binding partnership that may arise where, in fact, no formal partnership agreement is in effect. A person who by conduct or words represents, or allows him/herself to be represented, as a partner in a firm is liable for the credit or loans obtained by firm on the basis of such representation 6)A person who is not actually a partner of a firm but knowingly allows himself/herself to be represented as a partner of the firm is known as partner by holding out. 2.Such a partner can be held liable for the repayment of debt extended to the firm due to such representation.