Partnership is formed by agreement. In this partnership, the member in a firm is called as partner.
There are various kinds of partners. They are as follows:
1. Active partner: A partner who takes an active part in the conduct of the partnership business is known as an active partner.
2. Sleeping or Dormant partner: A partner contributes capital and shares in the profits or losses of the firm, but does not take part in the management of the business is known as sleeping partner.
3. Nominal partner: Such a partner neither contributes any capital nor is he entitled to manage the affairs of the business. He lends only his name to strengthen the firm.
4. Partner in profits only: When a person joins a firm as a partner on the condition that he is entitled to share profits in the firm, he is called as a partner in profits only.
5. Secret partner: A secret partner is one whose association is not known to the general public.