व्हाट इज द डिफरेंस बिटवीन नॉमिनल पार्टनर्स पार्टनर्स टॉकिंग एंड पार्टनर बाय होल्डिंग ऑफ द फॉलोइंग इज द स्टेटस ऑफ पार्टनर लाइब्रेरी एंड टू मोटर स्टैंड डेनियल ऑफ बिगर पार्टनर से फ्रॉम बॉर्डर फ्रॉम लवली
Answers
Explanation:
TYPES OF PARTNER - DEFINITION
Type of Partner
Capital Contribution
Management
Share in profits/losses
Liability
Active
Contributes capital
Participates in management
Shares profits/ losses
Unlimited liability
Sleeping or dormant
Contributes capital
Does not participate in management
Shares profits/ losses
Unlimited liability
Secret
Contributes capital
Participates in management, but secretly
Shares profits/ losses
Unlimited liability
Nominal
Does not contribute capital
Does not participate in management
Generally does not share profits/ losses
Unlimited liability
Partner by estoppel
Does not contribute capital
Does not participate in management
Does not share profits/ losses
Unlimited liability
Partner by holding out
Does not contribute capital
Does not participate in management
Does not share profits/ losses
Unlimited liability
SECRET PARTNER - DEFINITION
A secret partner is one whose association with the firm is unknown to the general public.
Other than this distinct feature, in all other aspects he is like the rest of the partners.
He contributes to the capital of the firm, takes part in the management, shares its profits and losses, and has unlimited liability towards the creditors.
NOMINAL PARTNER - DEFINITION
A nominal partner is one who allows the use of his/her name by a firm, but does not contribute to its capital.
He/she does not take active part in managing the firm, does not share its profit or losses but is liable, like other partners, to the third parties, for the repayments of the firms debts.
PARTNER BY ESTOPPEL - DEFINITION
A person is considered a partner by estoppel if, through his/her own initiative, conductor behavior, he/she gives an impression to others that he/she is a partner of the firm.
Such partners are held liable for the debts of the firm because in the eyes of the third party they are considered partners, even though they do not contribute capital or take part in its management.
Caselet:
Suppose Rani is a friend of Seema who is a partner in a software firm Simplex Solutions. On Seemas request, Rani accompanies her to a business meeting with Mohan Softwares and actively participates in the negotiation process for a business deal and gives the impression that she is also a partner in Simplex Solutions. If credit is extended to Simplex Solutions on the basis of these negotiations, Rani would also be liable for repayment of such debt, as if she is a partner of the firm.
PARTNER BY HOLDING OUT - DEFINITION
A partner by holding out is a person who though is not a partner in a firm but knowingly allows himself/herself to be represented as a partner in a firm.
Such a person becomes liable to outside creditors for repayment of any debts which have been extended to the firm on the basis of such representation.
In case he is not really a partner and wants to save himself from such a liability, he should immediately issue a denial, clarifying his position that he is not a partner in the firm.
If he does not do so, he will be responsible to the third party for any such debts.
MINOR AS PARTNER - DEFINITION
A minor is incompetent to enter into a valid contract with others, he cannot become a partner in any firm.
However, a minor can be admitted to the benefits of a partnership firm with the mutual consent of all other partners.
In such cases, his liability will be limited to the extent of the capital contributed by him and in the firm.
He will not be eligible to take an active part in the management of the firm.
Thus, a minor can share only the profits and can not be asked to bear the losses.
However, he may inspect the accounts of the firm.
The status of a minor changes when he attains majority.
ACTIVE PARTNER - DEFINITION
An active partner is one who contributes capital, participates in the management of the firm, shares its profits and losses, and is liable to an unlimited extent to the creditors of the firm.
These partners take actual part in carrying out business of the firm on behalf of other partners.
SLEEPING OR DORMANT PARTNERS - DEFINITION
Partners who do not take part in the day to day activities of the business are called sleeping or dormant partners.
A sleeping partner, however, contributes capital to the firm, shares its profits and losses, and has unlimited liability.