PARTNERSHIP

“Partnership is an association of two or more
persons to carry on as co-owners a business for
profit”.
KINDS OF PARTNERS
1.
2.
3.
4.
5.
Active partners
Sleeping/dormant/silent partners
Secret partners
Nominal partners
Minor partners
ACTIVE PARTNERS
These are the partners who take active part in
the business.
 They invest capital and share in profit and loss.
 They have unlimited liability for debts of the firm
in their profit sharing ratio.
 They have participation in decision making and
management.

SLEEPING/DORMANT/SILENT PARTNERS
These are the partners who invest capital but do
not take active part in management.
 They have all those rights and liabilities which
an active partner has.
 They also share in profit and loss.

SECRET PARTNERS
A secret partner is one who is not know to the
public as a partner.
 He has capital in the business, enjoys profit and
shares losses.
 He may also participate in management and
decision making.

NOMINAL PARTNERS
He is the person who is not a real partner, but to
the general public he is declared as a partner.
 He has no investment in the business.
 He does not share in profit or loss and is not
responsible for the debt of the business, but is
responsible for credit investment.

MINOR PARTNER
They have not attained majority.
 They are under 21.
 They have investment with a profit sharing ratio
but their liability is limited to their business
investment.
 They are not allowed to take part in the
management of the business , but they can
through their attorney, check the books of
accounts.
