Partnership and Types of Partnerships
This article describes about the different types of Partnerships and types of partnerships according to the Partnership act of India in 1932 and the Indian Contract Act of 1872. Read to know the Elements of Partnership, partnership deed, Registration of Firm and other related information.
Partnership Act of India 1932 has several measures that revolutionized the business which were following the Indian Contract Act of 1872.
This defines the partnership as a business carried on by all or any one of them for all.
Elements of Patnership
Important elements of partnership are :
(1) Association of 2 or more persons
(2) Existence of contract
(3) Carrying on a business
(4) Sharing of Profits
(5) Mutual Agency
A parnership firm cannot create another partnership firm as they cannot enjoy the legal person in action. Ther must exist a contract between the partners.
Partnership deed is the document that deals with the rights and obligations of the partnership. It not only contains the information about the name, contact of the business firm but also the time period of the partnership, profit sharing ratio, type of business etc.
Registratino of Firm
Business registration is very important in running a business. Registration of a company is very important as there are many provisions in the company registration. If a company is not registered then there is
* No suit against the partners
* No suit against third parties
* No suit of set off
Types of Partnership
Following are the important types of partnerships.
* Active or actual partnership
* Dormant or sleeping partnership
* Nominal partnership
* Sub partnership
* Partnership in profit only
In this type of partnership the partners are actively involved in the business and business relations and other aspects of the partnership firms.
In a dormant or a sleeping partnership, the partner will lend his name to the business but neither interested in the business nor the profit sharing from the business.
These type of partners are known to the outsiders only. They will not actually involve in the business.
If a partner wants to share his profits to others he can enter into the partnership with others stating the profit sharing levels or ratio. This is sometime referred to as parnership marketing.
Partnership in Profit only
Partners who does not like loss bearing can enter into partnership sharing only the profit. Such a parnership is called as partnership in profit only.
Did you like this resource? Share it with your friends and show your love!
Responses to "Partnership and Types of Partnerships"
19 Nov 2009 Member Level:
For such a resource. I am from BCOM background.So, i know that patnership is important part of business. After seeing and reading the articles. All the rules of partnership are recall back.
If you like my reply please rate it.
Notify me by email when others post comments to this article.
Do not include your name, "with regards" etc in the comment. Write detailed comment, relevant to the topic.
No HTML formatting and links to other web sites are allowed.
This is a strictly moderated site. Absolutely no spam allowed.
to fill automatically.
(Will not be published, but
to validate comment)
Type the numbers and letters shown on the left.
Complete the action items below to enter to win an iPad Mini from India Study Channel!
India Study Channel - Locker
Subscribe to Email
Get Jobs by Email
Forum posts by Email
Articles by Email
Awards & Gifts
Last 7 Days
ISC Technologies, Kochi - India. © All Rights Reserved.
Click the "Follow" button above to follow Tony John