Question

A partner who is entitled to share in the profits of a partnership firm without being liable to the losses, is called _________.

• A. partner of profits only
• B. sleeping partner
• C. active partner
• D. dummy partner

Answer 1

The correct option is A partner of profits only

A person who becomes a partner for sharing profits only is known as a partner in profits.

He contributes capital to the firm but does not take part in the management of the business . He is liable to the third parties like other partners.