question_answer

Explain different types of partners.

Answer:

Ans.     Different types of partners are given below:

1. General/Active Partner: Such a partner takes active part in the management of the firm.

2. Sleeping or Dormant Partner: Although he does not take active part in the management of the firm, he invests money, shares profit and loss, has unlimited liabilities.

3. Secret Partner: He participates in business secretly without disclosing his association with the firm to general public. His liability is also unlimited.

4. Nominal Partner: Such a partner only gives his name and goodwill to the firm. He neither invests money nor takes profit. But his liability is unlimited.

5. Partner by Estoppels: He is the one who by his words or conduct gives impression to the outside world that he is a partner of the firm whereas actually he is not. His liability is unlimited towards the third party who has entered into dealing with firm on the basis of his pretension.

6. Partner by Holding out: He is the one who is falsely declared partner of the firm whereas actually he is not. And even after becoming aware of it, he does not deny it. His liability is unlimited towards the party who has dealt it with firm on the basis of this declaration.