A Partnership firm can be of any of the following types-
1. Partnership at Will
A partnership at will is a kind of partnership in which there is no fixed time period. In other words, when there is no fixed time period for the expiration of the partnership, it is known as partnership at will.
2. Particular Partnership
A particular partnership is a type of partnership which is created with a specific aim or an objective. The partnership gets dissolved when the objective of the business is achieved or when the act for which the partnership is formed gets fulfilled.
However, on completion of the specific purpose, the partners can agree to continue the partnership. In the absence of this, the partnership comes to an end on the completion of the task.
3. Limited Liability Partnership (LLP)
A Limited Liability Partnership (LLP) is a kind of partnership in which some of the partners or all the partners have limited liability. It has therefore the elements of both a partnership and a corporation.
4. Unregistered Partnership Firm
Any partnership firm which is not registered under the Partnership Act, 1932, is known as an unregistered partnership firm. The provisions of the Partnership Act, 1932 does not applies to such firms as they are not registered under the Act.
Moreover, these partnership firms do not have the power to file cases against any third person.
5. Registered Partnership Firm
A partnership firm which is registered under the provisions of the Partnership Act, 1932, is known as a registered partnership firm.
Registered partnership firm is preferred over other forms of partnership firms, because these firms carry the benefits offered to the registered firm by the Partnership Act, 1932.
Types of Partners
Any partnership firm is formed by its partners, and their roles and responsibilities may change. In any partnership firm, there are these types of partners-
1. Active or Working Partner
An active person is a person who takes an active part in the business of the partnership. They take an active part in the business and management of the partnership. An active partner is also known as a managing partner.
Many times, an active partner is also referred to as an ordinary partner. An active partner shares more risk and return in comparison to a silent or a limited partner.
2. Sleeping or Dormant Partner
A sleeping partner, as the name suggests, is a partner who does not play an active role in the business and management of the partnership.
A sleeping partner provides capital to the partnership, but does not take an active part in the management of the partnership. A sleeping partner is also known as a dormant partner.
3. Nominal Partner
A nominal partner is a person who lends his/ her name to the partnership in return for some fees. Nominal person is usually a famous person, whose name is used as goodwill and that person in return takes some fees.
4. Partner by Estoppels or Holding Out
A partner by estoppels is not really a partner of the firm, but he/ she is a person who gives an impression to third party as if they are the partner of the firm.
When a person gives an impression to third party that they are the partner of the firm, by their words or some other form, they are known as partner by estoppels or holding out.
5. Partner in Profits Only
A partner in profit is a partner, who joins the partnership firm just for the profits of the firm. They are the person who lends their name for the partnership firm and in return they share the profits of the firm. They provide no capital to the partnership firm, they just share profits.
When a partner shares the profits of the firm with some third party, the third party is known as sub-partner. A sub partner is not liable to any debts nor is liable to any third party dealing with the firm.
7. Minor as a Partner
A minor is a person who is below the age of 18 years. Minor can be appointed as the partner of the partner of the firm, but cannot be held accountable for any acts of the firm.
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