What are the types of partnership? Explain. |
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| Ans : There are three types of partnership which are presented below:
A. General Partnership
:- Partnership firm with unlimited liability is general partnership. It is jointly involved to operate the business. The partners are individually or collectively liable for the payment of debts. There are two types of general partnership:-
(i) Partnership at will:- It is known as partnership for uncertain period. It performs business activities for unlimited period of time without any provision of termination. It is dissolved when all partners want dissolution.
(ii) Particular partnership:- It is established to carry on business for a fixed period of time or to complete a particular project. After completion of project, such partnership will dissolve itself. It two aspects are stated below:-
a) Partnership for a fixed term:- Such partnership is formed for the purpose of carrying on business for a definite of time. After termination of the given period, it is automatically dissolved.
b) Partnership for a Purpose:- It is established for the accomplishment of a specific business purpose or project. It comes to an end after the completion of definite purposes or project.
B. Partnership in Profit
:- In this types of partnership, one or more partners may be involved only to share profit and not to bear losses, on the basis of agreement. Profit sharing partners have no right to take active part in the management of the firm.
C. Limited Partnership
:- A limited partnership is that type of partnership in which there is one or more partners having limited liability. The liability of limited partners is limited to their capital investment. They can’t participate in the managerial activities and also do t have right to make decision and close the firm.
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