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.
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