Briefly explain the following types of parnership.
(i) Dormant Partner :
(ii) Active Partner
(iii) Nominal Partner
Briefly explain the following types of parnership.
(i) Dormant Partner :
(ii) Active Partner
(iii) Nominal Partner
(i) Dormant Partner: A partner who takes no share in the active business of a company or partnership, but is entitled to a share of the profits, and subject to a share in losses. This partner is also called a sleeping partner or silent partner.
(ii) Active Partner: A partner who contributes capital and also actively participates in the management and affairs of the business is called an active partner. He shares the profits and losses of the business and his liability is unlimited.
(iii) Nominal Partner: A partner who allows the partnership firm to use his/her name but does not contribute any capital or take part in the management and affairs of the business. He does not share the profits and losses of the firm but he is liable to the creditors for the repayment of the firm's debts.
(i) Dormant Partner: A partner who takes no share in the active business of a company or partnership, but is entitled to a share of the profits, and subject to a share in losses. This partner is also called a sleeping partner or silent partner.
(ii) Active Partner: A partner who contributes capital and also actively participates in the management and affairs of the business is called an active partner. He shares the profits and losses of the business and his liability is unlimited.
(iii) Nominal Partner: A partner who allows the partnership firm to use his/her name but does not contribute any capital or take part in the management and affairs of the business. He does not share the profits and losses of the firm but he is liable to the creditors for the repayment of the firm's debts.
