Mutual agreement between partners forms a partnership firm. A firm is said to be in partnership when two or more people work together and shares the profit gained from the business as well as bears the losses too. However, in a partnership firm each and every partner may not work equally, may not gain the profits equally. Roles and responsibilities of partners may change time to time. Partners can decide their roles in the firm, profits and losses. Some partners maybe active participants and some may not be an active participant at workplace but they may contribute money. There are different types of partners in a partnership firm. They are as follows:
- Active Partner
- Sleeping Partner
- Nominal Partner
- Partner by Estoppel
- Partner in Profits
- Minor as a Partner
1. Active Partner
An active person is a person who takes an active participation in the business of the partnership firm. Active partners are also known as working partners and ostensible partners. An active partner carries on the day-to-day business on behalf of all the other partners. In case the active partner wishes to retire first he must give a public notice regarding the same. If he fails to do so, he will remain liable for the acts of other partners even after his retirement. An active partner takes more risk as compared to other silent or limited partners.
2. Sleeping Partner
Sleeping partners are the partners who does not take active participation in daily business of the firm. Sleeping partner is also known as Dormant partner. They do not take part in day-to-day business but if in case of any major decision making happens then the sleeping partner gets involved Sleeping partner share profits and losses of the firm and also invest capital in the business. Sleeping partner need not to give any public notice while retiring.
3. Nominal Partner
A nominal partner is a person who does not have any real interest in the partnership. A nominal partner only lends his/ her name to the partnership in return gains some goodwill. This partner does not take any active participation. Therefore, he does not have any share in the profits as well as losses. However, he is liable to outsiders like the other partners.
4. Partner by Estoppels or Holding Out
A partner by estoppels is a person who is not a partner actually but holds out to others that he is a partner of the firm by his actions or words. He/she doe not contribute to the firm.
5. Partner in Profits Only
A partner in profit is a partner who will only share the profits of the firm. Partner in profit acts like an investor to the firm. He also not takes any active participation in the business. They are not liable for any losses.
When a partner of a firm shares the profits of the firm with some third party then that 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. A sub-partner does not hold any liability towards the firm.
7. Minor as a Partner
A minor is a person who has not attained the age of 18 years. According to Section 11 of Indian Contract Act a minor cannot enter into an agreement. However, under Section 30 of the Partnership Act, 1932 a minor can enjoy the benefits of partnership with the consent of other partners. A minor will share the profits of the firm, however, his liability for losses is only limited to his share of the firm. However, on attaining the age of majority within six months he has to decide whether he wants to become a regular partner or wants to withdraw from the partnership he has to decide within six months whether he will become regular partner of withdraw from partnership. The decision must be intimated through a public notice and failing to do so will make him treated as other partners and he will also become liable for all debts and obligations like other partners.
I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.
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