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Types of Partners in Partnership Firm
Partnership firm is result of Mutual agreement between Partners. Partnership firm run business as per its partnership agreement. In Firm , partners carry business of firm. As per nature , capacity and required partners can decide there role in firm , in loess in profit etc. Some Partners may wish to contribute money but no participation in day to day activities or vise versa. Some partners are will to take active participation in firm and more liability. Some partner just want to lend there name in firm. Due to such variety of Roles there are different Types of Partners in partnership Firm.
Different Type of Partners in Partnership firm can be classified as Active Partner , Sleeping or Dormant Partner ,Nominal Partner, Partner in Profits ,Minor as a Partner. Partnership firm deed is key document to get classification of types of partner , there roles & other terms & conditions. Duties and responsibilities vary at different levels. At each level comes more responsibility, including the training and supervision of lower-level partners. In this article we discussion about different types of partners in Partnership firm.
| S.No. | Type of Partner | Description |
| 1 | Active Partner | Active in Firm. Share profit and losses |
| 2 | Sleeping Partner | Not An Active partner. Not Know to outside world. Share profit & losses of firm |
| 3 | Nominee Partner | Become partner so firm can take benefit of his Goodwill. No Active participation in firm. |
| 4 | Partner by Estoppel | poses himself as a partner by words spoken or written |
| 5 | Partner in Profit Only | Share only Profit of Firm. No sharing of losses o firm. No Active participation in Firm. |
| 6 | Minor Partner | He can be added admitted to the benefit of partnership. Age is Below 18. Private property of the minor cannot be attached |
1.Active Partner
Active Partner is drive of Partnership firm. As name suggests he keep active participation in partnership firm day to day business operation. He bears unlimited liability of partnership firm. In most of partnership firm partners chooses to be an active partner for taking participation in business. Active partner can withdraw remuneration from Partnership firm. In case the active partner chooses to retire, he must give a public notice of his retirement. In situations where an active partner fails to do so, he will remain liable for the acts of other partners, post his retirement. Action taken by this partner in ordinary course of business shall be binding on all partners & firm.
2. Sleeping Partner
As name presents he is opposite of Active Partner. Sleeping partner in partnership firm does not take an active participation in firm day to day activities and decision making. In Case of major decision making in firm sleeping partner get involved in firm. Sleeping partner invest capital in business , share profit and losses of firm. Like other partners sleeping partner is liable to partnership firm.
3.Nominee Partner
Nominee partner who does not contribute capital in partnership firm. Nominee partners does not take active participation in firm. Nominee partner lend his name to firm to gain goodwill. Inside firm he is does not have active participation in firm and working. However like other partners he is liable to outsiders. Form Example a Know Professor of college retire from college and join as Nominee partner in Tuition class.
4.Partner by Estoppel
When a person is not a partner, but he poses himself as a partner by words spoken or written or by his conduct, is called a partner by estoppel or by holding out. A partner by estoppel or holding out shall be liable to the third parties who deal with the firm on the supposition that he is a partner even though he is not a partner. He does not contribute anything to the firm.
5.Partner in Profit Only
A Partner sharing in profit only and not in losses is called Partner in profit only. A Partner join partnership firm invest capital however have term as he will only take certain share in profit of firm is called Partner in profit only. He act like an investor of firm. For outside world he is not know. He does not take participation in day to day activities of partnership firm. However like all other partners since the liability of the partners is joint and several.
6.Minor Partner
Partnership firm is result of mutual agreement between two or more parties. In India Indian Partnership Act 1932 allows a minor can be introduced as partner in Partnership firm. Its important to note that a Minor cannot be admitted in partnership firm ( Age Below 18 ) however he can be added admitted to the benefit of partnership. Minor partners shall enjoy benefits in partnership firm. To Add Minor partner in partnership , firm shall enter in to agreement. Private property of the minor cannot be attached by the creditors.
