KINDS OF PARTNERS EXPERIE AGE NCE 1.Mi 1.Senio nor r 2.Ma 2.

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Question No. 6: How many kinds of partners in a firm? OR Describe the classification of partners. OR What are the kinds of partners in a partnership business? Answer: Kinds of Partners: INTRODUCTION: As there is difficult task to manage and control the business of a firm, so different types of partners perform the different function in the business. The persons enters into partnership through agreement are known as partners. They are classified in several ways, depending upon their extent of liabilities, participation in management, share of profit and other factors.

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LIABILI MANAGE TY MENT 1.Limit 1.Nomi ed nal 2.Unli 2.Sleepi mited ng 3.Activ e 4.Secre

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OTHER PARTNERS 1.Quasi

2.Holding out 3.Salaried 4.Insolvent

ACCORDING TO EXPERIENCE: 3. Senior Partner: Definition:

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2. Major/Mature/Adult Partner: Definition: Major partner means a partner whose age is 18 years or more. A major partner enjoys the profit and bears the losses. He can also make agreement with other parties. He is the regular member of the firm.

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ACCORDING TO AGE: 1. Minor/Immature Partner: Definition: Minor partner means a partner whose age is less than 18 years. =A minor partner enjoys the profit of firm but does not bear the losses. He cant be a full fledged member. On attaining the age of majority, he has to choose in six months whether he has to continue as a partner or not.

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5.Silent

5.Partner in Profit only 6.Deceased 7.Retired 8.Income 9.Sub partner 10.Partner at Will

4. Junior Partner: Definition: A partner who invests small capital and who has less experience his share in profit or losses is less than the other partners of the firm. ACCORDING TO LIABILITY: 5. Limited Partner: Definition: A limited partner is one whose liability is limited up to the amount invested in business. He is no allowed to manage or interfere in the business activities. 6. Unlimited Partner: Definition: When the liability of the partner is unlimited he is called unlimited partner. The debts of the firm can be paid even by the personal property of the partner. He can take part in the management of the business. ACCORDING TO MANAGEMENT: 7. Nominal Partner: Definition: Nominal partner means a partner who does not invest his capital and does not take part in the affairs of business. In reality he is not a partner but his name is used as a partner. He is liable for all debts.

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Senior partner means a partner who invests a large capital and who has much experience. His share in profit or loss of the business is more than other partners of the firm.

OTHER KINDS OF PARTNERS: 11. Quasi partner: Definition: Quasi partner means a partner who has retired from business but has not withdrawn his capital. His capital is considered as loan and he receives interest on it varying with the amount of profit. Strictly speaking he is not a partner; he is only a deferred creditor.

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10. Secret/ Silent Partner: Definition: He takes active part in the business but public does not know him as a partner of the firm. He contributes capital and share profit & loss and also liable to pay all the debts.

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9. Active/Working/Managing partner: Definition: Active partner means a partner who takes active part in the management of firm. He contributes hr capital and has share in profit & loss. He is also called the managing partner. The development of business depends upon the active partner.

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8. Sleeping/Dormant Partner: Definition: A sleeping partner means a partner who does not take part in management of firm. He provides his share of capital to the partnership firm. He takes his share profit and loss as per profit & loss sharing ratio.

17. Outgoing/Retired Partner: Definition:

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16. Deceased Partner: Definition: A partner who has died and his share of capital and profit is pad to his heirs (relatives) is known a deceased partner.

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15. Partner in Profit only: Definition: A partner who has share in profit but has not concern with losses or liabilities is called a partner in profit only. He does not take part in the management of business.

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13. Salaried Partner: Definition: A partner who does not invest in business but has a right to receive salary or profit or both is known as salaried partner. He is liable for all acts of firm like other partners. He is also known to the general public as a partner. 14. Insolvent Partner: Definition: A partner who is unable to pay the debts and his share of debt is paid by other partners is known a insolvent partner.

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12. Holding out partner or [Estoppels Partner]: Definition: A person who declares himself as partner of firm but in reality he is not a partner. He does not receive any profit but he is liable for debts which he received.

18. New/Incoming Partner: Definition: A person who is newly admitted to the firm with the consent of all the parties is called incoming partner. He is not liable for any act of the firm done before he becomes a partner unless he agrees. 19. Sub Partner: Definition: Sub partner who receives the share of profit from regular partner of firm. He is not responsible for any debts of firm. 20. Partner at Will: Definition: This type of partner will continue so long the partners have mutual faith, trust and confidence among them. 21. Partner without Capital: Definition: Sometimes partners are created in the business due to particular skills or business ability of such person, so they dont invest capital. To have benefits from his business ability the partners with capital make him also a partner in their business. The partner without capital is also given the agreed share out of profit. Conclusion:

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A partner who has retired from business is known as retired partner. He is not liable for those acts which are incurred after the date of his retirement.

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In Partnership business partners play an important role because they provide funds, services, experiences, useful advices, skills etc to enhance business.

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