Question

Attempt the following:

Explain different types of Partnership Firms.

Answer 1

TYPES OF PARTNERSHIP FIRM

→ General Partnership Firms
(Under Indian Partnership Act, 1932)

1. Partnership at will
2. Partnership for particular period
3. Partnership a particular venture

→ Limited Liability Partnership
(Under Limited Liability Partnership Act, 2008)

1. General Partnership: This partnership can be formed under the Indian Partnership Act, 1932, where the liability of all partners are unlimited, joint, and several.
   General Partnership can be divided into three Kinds:
   (a) Partnership at will: Such partnerships are formed and continued as per the Will of the partners. They are formed for an indefinite period. Any partner can terminate the partnership by giving notice to the firm. Such firms exist so long as there are mutual trust and co-operation among the partners.
   (b) Partnership for a particular period: Such partnerships are formed for a particular period of time. On the completion of the duration, the partnership firm automatically dissolves irrespective of the venture is complete.
   (c) Partnership for a venture or particular partnership: Such partnerships are formed for a particular venture or job. It comes to an end on the completion of the venture. For e.g. construction of roads, dams, bridges, buildings, etc.
2. Limited Liability Partnership: This kind of partnership is formed under the Limited Liability Partnership Act 2008. There are 2 kinds of partners.
   (a) Designated Partner: Limited liability partnership is one where there are at least two partners of which one must be a resident of India.
   (b) General Partner: In limited liability partnership apart from the designated partners all other partners have limited liability. They are called general partners.