Types of Partnership

This article summarizes the types of partnerships that exist. Active Partner: An active partner is also referred to as a working partner. An active partner performs a direct role in the management and running of the business. They also invest in the partnership business. Sleeping Partner: A sleeping partner is a partner who: Invests in … Read more The post Types of Partnership appeared first on Finance Strategists .

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Dec 31, 2022

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This article summarizes the types of partnerships that exist.

Active Partner: An active partner is also referred to as a working partner. An active partner performs a direct role in the management and running of the business. They also invest in the partnership business.

Sleeping Partner: A sleeping partner is a partner who:

• Invests in the business
• Shares the gains and losses of the business
• Does not participate in the conduct and management of the business
• Is known to the public as a partner
• Is liable to the firm’s creditors

Silent Partner: A silent partner is a partner who:

• Is known to the public as a partner
• Does not participate in the management and conduct of the business
• Is liable to the firm’s creditors as other partners

Secret Partner: A secret partner is a partner who:

• Takes an active part in the conduct and management of the business
• Is not known to the public as a partner
• Is liable to creditors like other partners
• Need not serve notice to creditors regarding their retirement from the business

Nominal Partner: A nominal partner is a partner who:

• Does not contribute toward capital
• Does not share the gains of the business
• Is publicly known as a partner (in fact, a nominal partner has allowed other partners to use their name as partner only to oblige)

Minor Partner: A minor partner is a partner who:

• Cannot themselves be a partner because they cannot contract
• Can share in the gains of the business with the consent of all partners
• Has another person to act as their guardian
• Does not bear the losses of the firm out of their private property

The post Types of Partnership appeared first on Finance Strategists.