Types of Partners in a partnership business world

There are many kinds of partners and their rights and obligations as provided under the partnership Act.


The partners of partnership firm may be classified in following categories: -

1. Actual/Active partner

2. Dormant or sleeping partner

3. Nominal partner

4. Partner in profit only

5. Sub Partner

6. Partner by estoppels or partner by holding out.


1. Actual/Active Partner Partners actively engaged in the conduct on business are known as “active partners”. They are full fledged partners in the real sense. If such partner wants to retire from the firm he must give public notice of his retirement from the firm in order to get himself absolved from the responsibly of the firm.

2. Dormant of Sleeping Partner: Some times, there are persons who merely become partners in a firm by contributing capital or even without capital and donot take active pact in the conduct of the partnership business. Such partners are liable to third parties as actual partner

Such partners can retire from the firm without giving notice but they have assess to the books of the accounts of the firm and can have a copy of the same.

Example:- X&Ystart a partnership firm wherein X is active partners and Y is dormant partner. This is valid partnership

3. Nominal Partner:- These are the partners who have no real interest in the firm . They donot invest or participate in the business of the firm but give their name as partner of the firm.

Example:- X is a renowned businessman. His son Y starts the business in which X has given consent to become partner of the firm which is to be run by his son with the sole purpose to help his son. X is only a nominal partner.

4. Partner in profits only:- Some times the partnership firm is formed to carryon business wherein a partner becomes


partner of the firm only for profits. In case the firm suffers loss, he shall not be liable for the loss. These type of partners have no say in the management of the firm. However, the liability of such partner towards third party is similar to active partner .

5. Sub Partner:- When a partner agrees to share his profit in a partnerships firm with an outsider such a outsider in called sub partner. The outsider cannot interfere business of the firm nor he is liable to third party as an active partner.

6. Partner by estoppel or holding all :- Section 28 – “Anyone who by words spoken or written or by conduct represent himself or knowingly permit himself to be represented himself to be a partner in a firm, is liable as a partner in that firm to anyone who has on the faith of any such representation gives credits to the firm, whether the person representing himself or represented to be a partner does or does not know that the representation has reached the person so giving credit”