Q.Write a short note on: Sleeping partner

An active partner is a full partner who contributes capital, actively manages the business and shares its profits and losses, with unlimited liability.

Active Partner

An active partner (also called a working or managing partner) is a partner who:

• contributes capital to the firm,
• takes an active part in the management and day-to-day running of the business,
• shares in the profits and losses of the firm in the agreed ratio, and
• has unlimited liability for the debts of the firm.

Because he actively represents the firm, if he wishes to retire he must give public notice of his retirement; otherwise he remains liable to third parties for acts done after retirement. He is the opposite of a sleeping (dormant) partner, who does not take part in management.

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A sleeping or dormant partner invests capital and shares the firm's profits and losses and carries unlimited liability, but does not participate in the active management of the business and usually remains unknown to the public.

A sleeping partner (also called a dormant partner) is a partner who contributes capital and shares in the profits and losses of the partnership firm but does not take an active part in the conduct and management of the business. Although he stays in the background, he is a full partner in law — he has unlimited liability for the firm's debts just like an active partner, and he is bound by the acts of the other partners. Such a partner is useful when a person wants to invest in a business and earn returns without devoting time to its running. Types of partners is a st …