Meaning of Partnership
Partnership is a form of business organisation in which two individuals combine to own and run a business for the purpose of making profit. It is a form of business in which 2 to 20 people come together, combine resources, contribute their skills, talent etc to run a business with the aim of making profit.
Types of Partnership
1. Ordinary partnership: Ordinary partnership is also known as general partnership; it is a partnership where all partners have equal responsibility in the affairs and management of the partnership business.
2. Limited Partnership: Limited partners do not take part in the day to day running of the business. A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners (GPs), there are one or more limited partners (LPs). It is a partnership in which only one partner is required to be a general partner
Kinds of Partners
• Nominal or quasi partners: This is a partner who contributes only his name to the formation of the business. He is always an important person in the community. He does not contribute capital and not involve in the managing of the business.
• Active partner: An active partner takes an active role in the business, he contributes capital and get involved in the day to day running of the business
• Sleeping or dormant partner: A sleeping or dormant partner contributes only his/ her money to the business but do not take active role in the business.
Sources of Capital
Sources of capital for a partnership business are mentioned below:
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