As we know that partnership firm is a type of business organization established and run by two or more than two partners. There are various types of partners according to their nature, activeness, age, participation etc.
Different types of partners can be described as follows:
Different types of partners can be described as follows:
1. General Partner(Active or working partner)
The general partner contributes capital, takes part in management and shares profit and losses. His liability is unlimited. The firm dissolves on retirement, insolvency and death of a general partner. He is known to outsiders.
2. Limited partner
The limited partner contributes capital but does not participate in management. His liability is limited to capital contributed. He is known to the outside world. The firm does not dissolve on retirement, insolvency and death of a limited partner.
3. Sleeping partner
The sleeping partner contributes capital but does not participate in management. His liability is unlimited ans shares profits and losses. This type of partner is not known to outside world. He is a passive partner.
4. Secret partner
The secret partner contributes capital and takes part in management. His liability is unlimited. He shares profit and loss. The secret partner is not known to the outside world.
5. Partner in profit.
The partner in profit contributes capital but does not take part in management. He shares profit only. He does not share losses. Such partner brings capital and goodwill. He is known to the outsiders.
Also Read: Rights Of Partners In The Partnership
6. Incoming partner or new partner
The incoming partner joins a firm as a new partner. The consent of existing partners is required to join new partner. He contributes capital and share profits and losses. He may also contribute for goodwill. He is liable for debts incurred only after joining the firm. He is known to outside world.
7. Outgoing partner or retired partner
The outgoing partner leaves the firm with the consent of other partners. He is liable for the debts incurred before retirement. Creditors should be notified about his retirement. The firm is liable to pay him his share of capital and profit at the time of retirement.
8. Minor partner
A minor cannot enter into a contract. He can be a partner for the benefits of partnership. Mutual consent of existing partners is needed. The minor partner contributes capital. He cannot participate in management. His liability is limited to his capital contribution. He shares profits. He can continue or stop as a partner when he becomes major.
9. Nominal partner
The nominal partner lends his name and reputations to the firm. This type of partner does not contributes capital and does not participate in management. He does not share profit of loss. He represents himself as a partner. He is liable to persons who believe that he is a partner.
10. Quasi partner
The quasi partner has recently retired. But his capital is with the firm as loan. He receives interest from the firm. He is like a creditor of the firm. He does not share profit or loss. He is not liable for activities of the firm after his retirement.
