Define sleeping and active partners......
Answers
Sleeping Partners : Some partners provide only the finance, but do not take part in the running of the business. Such partners are called sleeping partners.
Active Partners : Active partner is that who not only invests capital but looks after the activities of the business. Active partner always receives profits and a fixed salary for managing the business.
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A sleeping partner is a person who provides some of the capital for a business but who does not take an active part in managing the business.
An active partner is an invested person who is involved in the daily operations of the partnership. An active partner helps run the business to enhance his or her returns and is therefore considered a material participant. This person typically shares more risk and return versus a limited or silent partner.