Question 16 of 17
Q.Write a short note on: Active Partner
Yanam BieapBIEAP AP Intermediate (1st Year) Commerce Board 2023Subjective· 2mImportance★★★★★est
94% · 16/17 Questions
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Start your 14-day free trial to unlock the full solution →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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