Types of partners- The Indian partnership act, 1932

There are various types of partners in a partnership firm but before we go through the different types of partners we must give a look on to The Partnership Act, 1932.

Definition or Meaning of Partnership, Partner, Firm and Firm Name
Partnership is the relation between two or more persons who have agreed to share profits of a business carried on by all or any one of them acting for all. 

Persons who have entered into partnership with one another are called individual Partners, and collectively a Firm, and the name under which their business is carried on is called the Firm name.

Types of Partners in a Partnership Firm
1. Active or Ostensible partners:
Partners who take an active part in the conduct of the partnership business are called actual or Ostensible partners.
Whenever they are retiring from firm, they shall provide a public notice to this effect and all concerned.
If any such partner become insane or permanent incapable, this might be a ground for dissolution of entire firm.

2. Sleeping or dormant partners:
Partner who do not take active part in the conduct of the partnership business.
Whenever they are retiring from firm, they need not to provide any public notice to this effect to creditor and all concerned.

3. Partner in profits only:
A partner who has agreed with other partners that he will be entitled to a certain share of profits, without being liable for the losses, is known as a partner in profits only.
As a rule such a partner has no voice in the management of the business.

4. Nominal Partner: 
A case when name of any person is used as if he is a partner of firm, even though in reality, he is not a partner. He is not entitled to share profits. He shall be liable for all debts of firm.

5. Sub-partner: 
When a partner agrees to share his share of profits in a partnership firm with a stranger, such a person shall be called a sub-partner. He has no voice in management. Introduction of any such partner may need Consent of all the partners and can be a valid ground for moving for dissolution of firm.

6. Partner by estoppel or holding out:
Where a man holds himself out as a partner, or allows others to do it, he is then stopped from denying the character he has assumed and upon the faith of which creditors may be presumed to have acted. 


Conclusion- 
Here are few types of partners we discussed. The points above are brief and are written to make you understand the topics very well. For more updates please follow our blog - Rynus Commerce

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