What is Partnership?
Partner is the person who runs the business with other persons under the partnership. All members of the business are term as a partner. They all share the profit earned by the business. All partners are involved equally in the work of the business.
They all are equally responsible for the performance of the business. They all are held liable to the debts of the business. Every partner performs his clear defined duties timely. They all bring new ideas & techniques for the business. Partners aim at improving the overall performance and profit of the business. At last, they all are paid reward as per their contribution. Each partner joins the partnership as per their choice.
Types of Partnership in Business
He is a core member of the business. His role and functions are considered important for the business. He himself manages and runs the whole business daily. He acts on behalf of his remaining partners.
He is like an agent of rest all the partners on a day to day business. He is held liable for the activities of his remaining partners. At the time of retirement active partner gives public notice. After retirement, he is a discharge of all his duties.
This partner is not always active in business activities. He is the one who takes part in business on a routine basis. He does not take part in the daily activities of the business.
However, he shares profit or loss of the business like other partners. He even brings capital to the business. At the time of retirement, he does not give any public notice.
He is the person who does not have much involvement in the business. His interest in the partnership is little. He does not bring any capital for business.
Also, no profit of the business is shared with him. He is a partner in a partnership in name only. He is responsible for activities of his other partners to outsiders.
Partner by Estoppel
He is a person who becomes a partner in partnership with his actions & words. These through their behavior gave the impression of a partner to another. In real these are not a partner in the partnership.
They do not invest any capital in the business. Also, they do not share the profit of the business. They are responsible for the debts of the company to outsiders.
Partner in Profits Only
He is a person who does not take part in the loss of business. He only shares the profit of the business. Like other partners, he too brings capital to the business.
They do not take part in the management of business activities. But he is responsible for outsiders for the company debt.
According to the contract act, such person can’t be a partner. He is treated as a partner after rest all partner give their consent. He shares all the profits of the business. But he is responsible for the loss only to a certain limit.
After reaching 18 yrs. age, he has 6 months to become a partner. He is required to give public notice if he wishes to join or retire after 18 yrs. age.