explain any five partners in Parther ship firm?
Answers
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.
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Types of Partners in a Business Partnership
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Types of Partners in a Business Partnership
Partners are of different kinds in a business partnership. They are as working partner, sleeping partner, nominal partner, partner by estoppel, limited partner, secret partner, partner by holding out, sub-partner, partner in profit. They are briefly explained below.
Types of Partners in a Partnership
Types of Partners in a Partnership
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. Limited Partner
In foreign countries like U.K., the law of the land permits the admission of partners with limited liability. But in India, no one can be a limited partner. There is only one exception. The liability of a minor admitted for the benefits of partnership is limited to the extent of his capital contribution.
Five types of partners in a partnership firm.
Explanation:
- Active partners: Active partners are those partners in the firm who are directly involved in the day to day functioning of a partnership firm. An active partner is responsible for decision making, management, and day to day business of a firm. An active partner shares both profits and losses of the firm.
- Dormant partners: These are also known as sleeping partners. Dormant partners do not participate in the functioning or management of a partnership firm. These partners are not known to the general public. A dormant partner also shares both profits and losses in a firm.
- Nominal partner: When a person is not an actual partner but only allows himself to be recognized as a partner in the firm and lets a firm benefit from his goodwill, he is a nominal partner. Nominal partners do not participate in day to day functions of a firm.
- Partner by Estoppel: When a person appears to be a partner in a partnership firm using his conduct, he is a partner by estoppel. He is not involved with the working of the firm and does not share any capital.
- Partner in profits: A partner is known to be a partner in profits if he is only contributing capital and sharing a part of profit, but not losses.