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Types of partner



A Partnership is when two or more people work together and share the profits from the business or Profession. However, one must not always assume that all partners participate in the work or profits or even liabilities of the firm equally. In fact, there are various types of partners based on the extent of their liability, or their participation in the firm – like an active partner or dormant partner etc.

Duties of partners in a partnership

The following are some of the important duties of partners in a partnership:

  • To observe good faith.
  • To Indemnify for Loss.
  • To Attend to his Duties Diligently.
  • Not to Claim Remuneration.
  • To Indemnify for Willful Neglect.
  • To Share Losses.
  • To Hold and Use Property of the Firm.
  • To Account for Private Profits.
  • To Account for the Profits of a Competing Business.
  • To Act within Authority.
  • Not to Assign his Rights.

Types of Partners

Here we will look at six types of partners we come across on a regular basis. This list is not exhaustive, the Partnership Act does not restrict any unique Kind of Partnership that the partners want to define for themselves. Let us take a look at some of the important types of Partners.

1. Active Partner:

An active partner is an invested person who is involved in the daily operations of the partnership. An active partner helps run the business to enhance his or her returns and is therefore considered a material participant. This person typically shares more risk and return versus a limited or silent partner.

2. Dormant or Sleeping partner:

This is a partner that does not participate in the daily functioning of the partnership firm, i.e. he does not take an active part in the daily activities of the firm. He is however bound by the action of all the other partners.

3. Nominal partner:

A nominal partner neither owns the firm in any way nor does he make any decisions related to the company’s affairs. These nominal partners are the most well-known individuals, businessmen, celebrities, etc., who allow their names to be added to the company to increase its goodwill.

4. Partner by Estoppel:

If a person holds out to another that he is a partner of the firm, either by his words, actions or conduct then such a partner cannot deny that he is not a partner. This basically means that even though such a person is not a partner he has represented himself as such, and so he becomes partner by estoppel or partner by holding out.

5. Secret partner:

The position of a secret partner lies between active and sleeping partner. His membership of the firm is kept secret from outsiders. His liability is unlimited and he is liable for the losses of the business. He can take part in the working of the business.

6. Partner in profits only:

This partner will only share the profits of the firm, he will not be liable for any liabilities. Even when dealing with third parties he will be liable for all acts of profit only, he will share none of the liabilities.

7. Minor partner:

A minor is a person who has not yet attained the age of majority. A minor cannot enter into a contract according to the Indian Contract Act because a contract by a minor is void ab initio. However, a minor may be admitted to the benefits of an existing partnership with the consent of all partners. The minor is not personally liable for liabilities of the firm, but his share in the partnership property and profits of the firm will be liable for debts of the firm.


A partnership deed is a legal and notarized document hence it protects the partners and their rights. it helps solve disputes that may take place in the future by providing maximum satisfaction to all parties. if have any query contact company suggestion.

CS Shweta Sharma

CS Shweta Sharma having experience of three years under CS firm and also having degree of B. Com and M. Com. Having expert knowledge of ROC related work and other company related compliances with MCA.

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