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Six partnerships that define a Partnership Business

PARTNERS

Creating a business or even holding a business is very difficult in today’s competetive market where all other competitors are ready to pull you down. One can’t handle a business on his/her alone, he/she must have someone who can help in running business properly in various ways. These who are PARTNERS.

A partner in a business can be proved to be very helpful in respect to providing capital, sharing losses, expand business etc. Therefore, we will discuss about some types of partners in a business playing their role.

 

1) ACTIVE PARTNER:- An active partner is a partner who actively takes part in all managing decisions and always have the equal liability as other partners. He/she will always take part in important decisions and take care that firm runs smoothly by serving the co. actively. He equally shares profit and losses as well as contribute to capital. He can only retire by giving a public notice.

 

2) SLEEPING PARTNER:-  As name tells a sleeping partner is the one who does’t participate in any of the business meetings or decisions, he can be absent during important discussions unlike active partner, but like active partner he will equally share profits and losses and also contibute to capital. He can retire without a prior notice.

 

3) OSTENSIBLE PARTNER:- An ostensible partner is the one who hasn’t have any interest in the business but lends his name to firm, He doesn’t contributes capital and even takes no profit share. but he is liable to pay and act as an actual partner to third party.

 

4) PARTNER IN PROFITS ONLY:- A partner who only withdraws profit not share losses in business is a partner in profits only.

5) MINOR PARTNER:- We all know that partnership exist due to contract between partner and if the person is not capable of entering into contract then he can’t be a partner, thus a person with age < 18 cannot become a partner, but under the indian partnership act 1932 a minor can be admitted by consent of all existing partners. He share profits according to his share in the firm and have access to all accounts of the firm. He can’t sue the other partners related to official matter. His liability also depends on his share in firm and his assets are not liable to creditors.

 

6) OTHER PARTNERS:- One is a secret partner who doesn’t want to disclose his relation with firm in general public.

Outgoing partner, who retires voluntarily without causing dissolution of the firm.

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Prateek Gupta

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