TYPES OF PARTNERS

TYPES OF PARTNERS

Active or Actual or Ostensible partner:

He acts as an agent of other partners for all acts done in the ordinary course of business. In the event of his retirement, he must give a public notice in order to absolve himself of liabilities for acts of other partners done after his retirement.

Sleeping or Dormant Partner:
They are called as ‘sleeping’or ‘dormant’ partners. They share profits and losses and are liable to the third parties for all acts of the firm. They are, however not required to give public notice of their retirement from the firm.

Nominal Partner:

 A person who lends his name to the firm, without having any real interest in it, is called a nominal partner.
He is not entitled to share the profits of the firm. Neither he invest in the firm nor takes part in the conduct of the business. He is, however liable to third parties for all acts of the firm.

Partner in profits only:

 A partner who is entitled to share the profits only without being liable for the losses is known as the partner for profits only and also liable to the third parties for all acts of the profits only

Incoming partners:

 A person who is admitted as a partners into an already existing firm with the consent of all the existing partners is called as “incoming partner”. Such a partner is not liable for any act of the firm done before his admission as a partner.

Outgoing partner:

 A partner who leaves a firm in which the rest of the partners continue to carry on business is called a retiring or outgoing partner. Such a partner remains liable to third parties for all acts of the firm until public notice is given of his retirement.

Partner by holding out (Section 28):

 Partnership by holding out is also known as partnership by estoppel. Where a man holds himself out as a partner, or allows others to do it, he is then stopped from denying the character he has assumed and upon the faith of which creditors may be presumed to have acted.