Types of partners
- Actual or ostensible partner:
A partner who has by agreement become a partner and who takes active part in the conduct of the partnership business is an actual or ostensible partner. He is the agent of the other partners for the purpose of the business of the partnership.
- Sleeping or dormant partner:
A sleeping partner is one who does not take an active part in the conduct of the business of the firm. He , like other partners, invests capital and shares in the profits of the business. He is equally liable along with other partners for all the debts of the firm, even though his existence is kept a secret from the outsiders dealing with the firm.
- Nominal partner:
A partner who lends his name to the firm, without having any real interest in it, it is called a nominal partner. He does not invest in the business of the firm, nor does he share in the profits or take part in the management of the business of the firm. But he, along with other partners, is liable to the outsiders for all the debts of the firm.
- Partners in profits only:
When a partner agrees with the others that he would only share the profits of the firm and would not be liable for its losses, he is in own as partner in profits only.
- Minor Partner:
Partnership arises from contract and a minor is not competent to enter into contract. Therefore, strictly speaking, a minor cannot be a full-fledged partners. But with the consent of all the partners he can be admitted into partnership for benefits only. He is not personally liable to third parties for the debts of the firm, on attaining majority, if he continues as a partner, his liability will become unlimited with effect from the date of hi original admission into the firm.
- Limited partner:
A partner whose loss responsibility is restricted to his share only is called limited partner. He cannot take post in the management of a firm.
7. Working partner:
it may, at times, be agreed between the partners that one of them shall, because of certain special qualifications, work the business and have control over it. Such a partner may be called a working partner.
- Unlimited partner:
When the liability of the partner is unlimited he is called unlimited partner. The debts of firm can be paid even by the personal property of the partner.
- Incoming partner:
A person who is admitted as a partner into an already existing firm either with the consent of all the parties or in accordance with a previous contract between the partners permitting the introduction of a new partner is called new partner. The incoming partner does not become liable for any act of the firm done before he became a partner, unless he agrees to be liable for obligations incurred before his admission into the firm.