Answer the following questions:

Who are the different types of partners ?

Partnership firms are characterized by the division of ownership between two or more partners. In the Partnership Firm Act of 1932, it is defined as the relation between the persons who have agreed to share the profits of a business carried on by all or any of them acting for all. The different forms of partners are as follows –

• Active Partners – these partners are actively involved in the daily work of the business. They contribute a fixed amount of capital and the profits and losses are shared in proportion to this contribution.

• Sleeping Partners - these partners are not actively involved in the daily work of the business. They contribute a fixed amount of capital and the profits and losses are shared in proportion to this contribution.

• Nominal Partners – these partners are neither actively involved in the daily business matters nor do they contribute capital. They are thus not entitled to any share of the profit but are often liable for the losses.

• Minor Partners – the age of a person determines this. Minor partners are below 18 years of age, and can only be added to the business as partners by the consensus among the other partners. They are eligible for the profits but excluded from the losses.

Beyond these four types, concerns also witness other types of partners which include secret partners, limited partners and also those who are eligible only for profits.