The types of partnership are as below:
Active Partner: Active partner is also named as a working partner. He takes active part in the management and running of the business. He also invests in the partnership business.
Sleeping Partner: Sleeping partner is one who:
- Invest in the business.
- Shares gains and losses of the business.
- Does not participate in the conduct and management of the business.
- Is known to the public as partner.
- Is liable to firm’s creditors.
Silent Partner: Silent partner is one who:
- Is known to the public as partner:
- Does not participate in the management and conduct of the business.
- Is liable to the firm’s creditors as other partners.
Secret Partner: Secret partner is one who:
- Takes active part in the conduct and management of the business.
- Is not known to public as a partner.
- Is liable to creditors like other partners.
- Need not serve notice to the creditors regarding his retirement from the business.
Nominal Partner: Nominal partner is one who:
- Does not contribute towards capital.
- Does not share gains of the business.
- He is publicly known as a partner. Actually, he has allowed other partners to use his hame as partner only to oblige
- He himself can not be a partner because he can not contract.
- He can share in the gains of the firm with the consent of all partners.
- There should be some person to act as his guardian.
- He will not bear losses of the firm out of his private property.