Question

Name the following:
1. A person who lends his name and goodwill for the benefits of a partnership film.
2. A person who contributes capital but does not take part in the business of the firm.
3. A document containing terms and conditions of partnership.
4. A partnership set up for a specific project
5. A person who contributes capital, participates in the business but whose identity is not disclosed to outsiders.

Answer 1

1.Nominal Partner- A person who neither has ownership rights or active involvement in the firm’s affairs, but has a strong interest in the success of the partnership firm. Often a well known, well connected individual whose association lends credibility and recognition to the firm is suited to the role of a nominal partner. This individual also known as a limited or ostensible partner, is paid a fee for his service.

2.Sleeping Partner- A dormant partner ; one whose name does not appear in the firm, and who takes no active part in the business, but who has an interest in the concern, and shares the profits, and thereby becomes a partner, either absolutely, or as respects third persons.

3.Partnership Deed- Partnership is an agreement between persons to carry on a business. The agreement entered into between partners may be either oral or written. But, it is always desirable to have a written agreement so as to avoid misunderstandings and unnecessary litigations in future. When the agreement is in written form, it is called ‘Partnership Deed.’ It must be duly signed by the partners, stamped and registered. Any alteration in partnership deed can be made with the mutual consent of all the partners.

Although it is left to the choice of the partners of the firm to decide themselves as to what should be mentioned in their partnership deed, yet a partnership deed generally contains the following:

1. Name of the firm.

2. Nature of the business.

3. Names of partners.

4. Place of the business.

5. Amount of capital to be contributed by each partner.

6. Profit sharing ratio between the partners.

7. Loans and advances from the partners and the rate of interest thereo

8. Drawings allowed to the partners and the rate of interest thereon.

9. Amount of salary and commission, if any, payable to the partners.

10. Duties, powers and obligations of partners.

11. Maintenance of accounts and arrangement for their audit..

12. Mode of valuation of goodwill in the event of admission, retirement and death of a partner.

13. Settlement of accounts in the case of dissolution of the firm.

14. Arbitration in case of disputes among the partners.

4. Particular Partnership- The term that is given for a joint partnership that is formed for the purpose to conduct one transaction.

5.Secret Partner- A secret partner, unlike a silent partner, has a say in the business' operations, but the public is not aware that the secret partner is involved in the business. Her name is not associated with the business in any way. A secret partner may have a tarnished reputation from a previous business failure and doesn't want that reputation to taint the new business, or she simply may prefer to operate anonymously.