Partnership Act- Types of partnership and Types of Partners

You can make you own type if you could describe them with certain common features. For example "Fraud Partner", meaning partners which commits fraud, greedy lier etc.! However below are certain types are partner for academic purpose.

Types of Partnership

Partnership At Will

Section 7 provides for partnership at will. It says that whenever there is no provision for the duration of their partnership  or for the determination of partnership (coming to an end), then it would be termed as partnership at will.

This kind of partnership is important for dissolution of partnership, which we will cover later.

Particular Partnership

When two or more people come together for particular venture or adventure or undertaking then it is called as particular partnership. Section 8 of the Act provides the definition of particular partnership.

For example Mr Modi and Mr Rahul come together to make a flyover as a partner!  (And then inaugurate it!)

Partnership for fixed term

In this kind of partnership, duration is fixed and partnership comes to an end after expiry of term. For example, Mr A and B together take contract from Railways to provide some services as partners for 1 year, then this would be partnership for fixed term. Typically such partnership exists for contracts given by Government etc.

If partners continue business after fixed period it becomes partnership at will.

Types based on Liability

First there is Limited partnership:  A limited partnership allows each partner to restrict his or her personal liability to the amount of his or her business investment. Not every partner can benefit from this limitation -- at least one participant must accept general partnership status, exposing himself or herself to full personal liability for the business's debts and obligations. The general partner retains the right to control the business, while the limited partner(s) do(es) not participate in management decisions. Both general and limited partners benefit from business profits. 

Limited Liability partnership: Limited liability partnerships (LLP) retain the tax advantages of the general partnership form, but offer some personal liability protection to the participants. Individual partners in a limited liability partnership are not personally responsible for the wrongful acts of other partners, or for the debts or obligations of the business. 

In Indian there is separate act i.e Limited Liability Partnership Act which governs above partnership.

Types of Partners

  1. Active Partner: Who actively participate in normal business conduct
  2. Sleeping Partner: Doesn't take active part in business . (And sleep!)
  3. Nominal Partner: A partner who lends his name to the firm without having any real interest in it. For example famous person agreeing to be partner, just for reputation!
  4. Sub Partner: When partners agrees to share profits to another person, then this person will become sub partner. Will he have all partnership rights ? 
  5. Holding out partner: It will be discussed in another article on Section 28


Thanks
Legalfundaa






Comments

Post a Comment

Followers

Popular posts from this blog

Privileges and Immunities to Administration in Suits

Introduction You know government can enter into contracts. Government can start some business. It mean government can sue other people, or you can sue the government. Before you initiate a legal proceedings against government, or even after legal proceedings are initiated, there are some relaxations to government.( OK, we will use Government/Administration as per our discretion interchangeably in this post, but they will mean the same ). So, it might happen that to prove something you may need a document or evidence, but government may be given exemption to produce evidence in that regard. Let's take one example.  General law is that burden of proof is on prosecution. Meaning, the one who accuses other  needs to prove the crime/offence by other. But when government accuses you of Sedition, you have to prove your innocence, burden of proof is on YOU. This is scary, as many times government in power just accuses people of sedition who opposes their ideas/policies, and put oppone...
Read more

Legal History-Administration of Justice in Bombay (1668-1726)

Image
Story About Bombay In 1534, Portuguese acquired Bombay from Local Hindu Raja. Then Bombay was given to King Charles II as dowry in his sister's marriage to in 1661. In 1668 Bombay was given to rent to East India Company for a rent of 10  £ . By today's exchange it would be around 100 Rs. So  yes, Bombay was given on rent to East India Company for the price of 10 Vada-Pav. Administration of Bombay was subordinate to Surat back then. After renting it, company issued a charter in 1668 granting company some rights to make laws to deal with Bombay. Like Administration in Madras, development of Earlier administration could be studied in 3 stages. First Stage: 1670-1683 (Aungier Eara) During this period Bombay was subordinated to Surat. The Governor of Surat was ex-officio Governor of Bombay, though Bombay had Deputy Governor and Council. Gerald Aungier brought some changes in Administration of justice. Two plans, i.e plan of 1670 and plan of 1672 made progress in so...
Read more

Overview of Appeal in CrPC

Image
Introduction Here is the simplistic hierarchy of the Courts. (JMFC stands for Judicial Magistrate of First Class) Not so serious cases are tackled by Lower courts. Serious cases are tackled by Sessions court.  We humans are not Gods. Courts are presided by humans and its possible that they can make a mistake. They should be remedy to people when courts commits  mistake. One of such remedy is Appeals. Remember this one, you don't have right of Appeal in all the cases even if you feel Court had committed some mistake. Criminal Procedure Code gives a right to appeal in specific circumstance.  CrPC provides circumstance when you CANNOT appeal. Apart from CrPC, constitution also have certain provisions related to Appeal. Specific laws like NIA Act, UAPA Act etc have provided separate procedure of Appeal.   In this post we will cover below things When you CANNOT appeal ? Who can appeal and for What purpose ? Appeals to Sessions Court Appeals to High Court Appeals to Suprem...
Read more