Partnership and Its Types
Partnership and Its Types
Sir Saleem Abbas
10/10/2012
Islamia university of bahawalpur
Partnership
A partnership arises whenever two or more people co-own a business, and share in the profits and losses of the business. Each person contributes something to the business -- such as ideas, money, or property -- though management rights and personal liability will vary.
In Pakistan the partnership firms are registered under the partnership act 1932 which defines the partnership as
“The relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”
There should be at least two or maximum twenty partners in a firm with the exception of banking where maximum of ten partners could make the partnership
A partnership may be registered with the Registrar of Firms of an area where the office of the firm is situated or proposed to be situated. A statement in prescribed form must be delivered to the relevant Registrar stating:
• Firm name
• Place or principal place of business of the firm
• Names of any other places where the firm carries on business
• Date when each partner joined the firm
• Names in full and permanent addresses of the partners
• Duration of the firm
• Foretasted statement signed and verified by each partner
Types of partners
Active or working partner:
Such a partner contributes capital and also takes active part in the management of the firm. He bears an unlimited liability for the firm's debts. He is known to outsiders. He shares profits of the firm. He is a full-fledged partner.
2. Sleeping or dormant partner:
A sleeping or inactive partner simply contributes capital. He does not take active part in the management of the firm. He shares in the profits or losses of the firm. His liability for the firm's debts is unlimited. He is not known to the outside world.
3. Secret partner:
This type of
Sir Saleem Abbas
10/10/2012
Islamia university of bahawalpur
Partnership
A partnership arises whenever two or more people co-own a business, and share in the profits and losses of the business. Each person contributes something to the business -- such as ideas, money, or property -- though management rights and personal liability will vary.
In Pakistan the partnership firms are registered under the partnership act 1932 which defines the partnership as
“The relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”
There should be at least two or maximum twenty partners in a firm with the exception of banking where maximum of ten partners could make the partnership
A partnership may be registered with the Registrar of Firms of an area where the office of the firm is situated or proposed to be situated. A statement in prescribed form must be delivered to the relevant Registrar stating:
• Firm name
• Place or principal place of business of the firm
• Names of any other places where the firm carries on business
• Date when each partner joined the firm
• Names in full and permanent addresses of the partners
• Duration of the firm
• Foretasted statement signed and verified by each partner
Types of partners
Active or working partner:
Such a partner contributes capital and also takes active part in the management of the firm. He bears an unlimited liability for the firm's debts. He is known to outsiders. He shares profits of the firm. He is a full-fledged partner.
2. Sleeping or dormant partner:
A sleeping or inactive partner simply contributes capital. He does not take active part in the management of the firm. He shares in the profits or losses of the firm. His liability for the firm's debts is unlimited. He is not known to the outside world.
3. Secret partner:
This type of