Examples of partnership firm in india
Answers
ntribution made to the third party for the arrangement.
Sub-partner:
When a partner agrees to share his profits derived from the firm with a third party, that person is known as a sub- partner. He cannot represent himself as a partner in the original firm. He does not have any rights against the original firm neither he is liable for the acts of the firm. He can claim the agreed share of profits form the contracting partner only.
Minor as a partner: Answer:
Explanation:
Types of Partnerships in India
The most used partnership types are listed here with their distinct features to allow you choosing the suitable type.
General Partnership:
In this type of partnership, each partner has right to take decision about the working and management of the firm. Downside being that the partner’s liability is unlimited and in case of a financial error / loss incurred by the act of a single partner the personal assets of all the partners can be taken away to pay back the debts and creditors’ claims.
General partnership is further bifurcated into two categories:
1. Partnership at will:
Usually when a partnership is created, it is upon the partners to decide till when they want the partnership to exist. Hence, whenever a partnership is created without a specific time limit of its closure, its termed as partnership at will. The dissolution of partnership is the matter of mutual consideration when need arises and is not pre-decided. It is upon the partners to decide mutually till what period of time they want the partnership to be functioning.
2. Particular partnerships:
This is the type of partnership that is created with an aim to carry out a specific undertaking. When partnership is created for a project of a temporary contract-based work or a specific business only, they are termed as particular partnerships. Once the objective of the business is achieved or the act for which the partnership was created in fulfilled, the partnership will be dissolved. However, the partners have the discretion to come to an agreement in case they wish to continue the said partnership. But in the absence of this, the partnership ends when the task is complete. For example, a partnership for the construction of a building or partnership for producing a movie.
Limited Liability Partnership (LLP):
A limited partnership unlike general partnership is a corporate form of business organization. Here, the liabilities are limited to each partner according to their agreed contribution to the business. The personal property of a partner cannot be attached to pay back the firms debts. This hybrid organization is governed under the Limited Liability Partnership Act, 2008 and not under Partnership Act.
Types of Partners
The partnership is formed with its partners and their roles and responsibility may also be changed. Based on their participation and roles in the firm, here are the types of partners in Partnership Firm.
Active or Working Partner:
This is the partner that is actively involved in the management and other important functional aspects of the partnership firm. He bares unlimited liability in case of debts. An active partner decides how the firm operates with his active participation and contribution as a partner. In case the active partner chooses to retire, he must give a public notice of his retirement. In situations where an active partner fails to do so, he will remain liable for the acts of other partners, post his retirement.
Dormant or Sleeping Partners:
As the name suggests a dormant partner is the one that is not interested in daily management or functional aspects of the partnership firm, but he may be consulted while taking major decisions for the firm. The partnership of this partner may not be known to the outsiders, but they invest in the firm by contributing a chunk of capital to the firm. In case of a debt he is liable to clear it out on behalf of the firm. A dormant partner is not required to file a public notice to announce his retirement.
Nominal Partner:
A person who does not have any real interest in the business or the working of the firm nor he has any rights in the profits is a nominal partner of the firm. He also does not usually have any say in the management and working of the business, but he is liable to outsiders as an actual partner. He just lends his name to the firm, so that it could advantage from his/her reputation and name and is treated like an actual partner. For example: a partnership is executed with a celebrity or a business tycoon for value addition or for promoting a brand with that person’s good will and fame.