Different types of Partnerships

Depending on the reason behind which a particular partnership is made, partners may be of different types. To understand this better, consider the following:

Active partners:
The partners who actively participate in the day-to-day operations of the business are known as active partners. They contribute capital and are also entitled to share the profits of the business. They also share the losses that the business faces.

Dormant partners:
Those partners who do not participate in the day-to-day activities of the partnership firm are known as dormant or “sleeping partners”. They only contribute capital and share the profits or bear the losses, if any.

Nominal partners:
These partners “only” allow the firm to use their “name” as a partner. They “do not” have any real interest in the business of the firm. They do not invest any capital, or share profits and also do not take part in the business of the firm. However, they do remain liable to third parties for the acts of the firm.

Minor as a partner:
In special cases a minor can be admitted as partner with certain conditions. A minor can only share the profit of the business. In case of loss his liability is limited to the extent of his capital contribution for the business.

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Table Of Contents

  1. How to incorporate?
  2. Understanding Sole Proprietorships
  3.   - Advantages of Sole Proprietorships
  4.   - Disadvantages of Sole Proprietorships
  5.   - What kind of business is suitable for Sole Proprietorships?
  6.   - How to start a Sole Proprietorship business?
  7. Understanding Partnerships Business
  8.   - Advantages of a Partnership Business
  9.   - Disadvantages of a Partnership Business
  10.   - Different types of partnership firms
  11.   - Business suitable for Partnerships legal structure
  12.   - How to form partnership deeds & start a partnership firm?
  13. Understanding Joint Stock Companies (Private & Public Ltd.)
  14.   - Advantages of Joint Stock Companies
  15.   - Disadvantages of Joint Stock Companies
  16.   - Business suitable for Joint Stock Companies
  17.   - Procedure to start a Joint Stock Company? (Incorporation)