Different Kinds Of Partnership
( Originally Published 1918 )
A General Partnership is constituted between individuals if they agree to enter into a general or particular business, to share the profits and losses together without fixing any limitations or conditions.
A Special or Limited Partnership is an agreement entered into to allow a special partner, whose name does not appear in that of the firm, to put in a limited amount of capital and to receive a corresponding share of the profits, and be held correspondingly responsible for the contracts of the firm, but only to the extent of the capital contributed by him, and no special partner can interfere in or transact firm business. A special 'or limited partnership agreement or certificate must generally be acknowledged or sworn to and recorded.
Such partnerships were unknown to the common law, and the limitation of liability is secured in this country only by strict compliance with the particular requirements of the statutes of the several States on the subject.
The statutes generally require such a partner-ship to be defined in a certificate, acknowledged like a deed, which must set forth the firm name, nature of business, names of general and special partners, distinguished as such, and the amount which each special partner contributes.
An Ostensible Partner is one who is known as such to the world.
A Secret Partner is one who is not openly or generally so declared. He is not liable for debts contracted after his retirement, although he has given no notice of the same.
A Dormant or Silent Partner is one who takes no part in the transaction or control of the business, but shares in the profits and losses according to certain agreements.
A Nominal Partner is held out to the world as such without actually participating in the profits and losses of the business.