Question

How you will classify partner who invest money into the business of the firm, actively participate in the functioning and management of the business and share its profits or losses?

• A. Active partner
• B. Sleeping or dormant partner
• C. Nominal partner
• D. Partner in profits only

Answer 1

The correct option is A Active partner

A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals.

According to the Partnership Act, Active partners are the partners who invest their money into the business and actively participate in the functioning and management of the business and even share the profits or losses of the business.