Definition
of Partnership Firm
As
per Indian Partnership Act Partnership can be defined as “The relationship
between persons who have agreed to share the profits of a business carried on
by all or any of them acting for all.”
Meaning
of Partnership
Thus
from the above definition we can say that partnership means two or more persons
coming together having similar interest in a business and are willing to carry
out the activities of business by anyone or all and are ready to share the
profits among themselves on the agreed percentage.
Features
of Partnership
§ It is an association of two or more persons.
§ Agreement brings all the partners together.
§ It is a form of carrying business.
§ It is a form of business where all or anyone will be acting and
carrying out all the activities of the business.
§ All the partners will share the profit arising from business occurred
on their agreed percentage in the agreement.
Types
of Partners in Partnership firm
There
are various types of Partners in a partnership. They are as follows
§ Sleeping or Dormant Partner:
He is the partner in a partnership firm who has access to books of accounts but is not revealed to the outsiders. He is liable to receive
profit for his capital.
§ Nominal Partner:
He is the person whose name is used in business but he is not a member
of the firm. He is liable to the third parties who give credit to the firm by
seeing his name. He is also liable to receive the agreed profits arising from
business.
§ Partner by Profit only:
He is the partner who gets a share from the profits and is not
ready to share losses. He is liable to the outsiders and he does not take part
in the management if the business.
§ Partner by Estopped or Holding:
He is a person who without being a partner conducts himself as to
lead others to believe him as a partner. In simple words if one declares to be
a partner and does not disclaim the partnership one will be treated as partner
by holding only.
§ Incoming Partner:
He is the partner who is newly admitted to the firm. He does not
hold any responsible for the losses and debts obligations that are incurred by
firm before his joining.
§ Sub Partner:
He is the person who gets a share from one of the partner’s
profits but he is not liable to the debts of firm.
§ Retiring Partner:
He is the person who is going to retire from the partnership and
is liable for the all the obligations till his retirement and will be liable to
future retirements too if he is not giving a public notice of his retirement.
§ Minor Partner:
A minor can be a partner to a partnership firm only when all the
partners are agreed. Minor is personally not responsible for a debts of the
firm but his profits will be liable to the debts and obligations. He does have
an access to books of accounts. A minor on attaining majority within six months
should give a public notice regarding whether he is partner or not of a
partnership firm. If he doesn’t then it is agreed that he is full-fledged
partner of the partnership firm.
Good and much useful article.
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