The partnership firms can be commonly distinguished as a general partnership and limited liability partnership (LLP). The General Partnership can be further divided into three groups’ viz. partnership at will, particular partnership and fixed term partnership.
The agreement for PARTNERSHIP AT WILL is formed for carrying on general business and it does not specify the time for termination of partnership or duration of the partnership. It can be terminated at any time by mutual agreement. As per partnership act, a partnership at will can be dissolved by any partner serving notice in writing to other partner/s of his intention to do so.
PARTICULAR Partnership is a partnership formed for a single transaction and it would last as long as the business is not completed. If the partnership firm goes to carry on other business also in such cases (in the absence of an agreement to the contrary), the rights and duties of the partners in the other type of undertaking will continue to be the same as in the initial enterprise.
FIXED TERM PARTNERSHIP is formed for a definite period of time. The partnership comes to an end on a date specified in the partnership deed unless express mention in the contract to the contrary. If the business is continued beyond such expiry period, the partnership is deemed as a partnership at will. In the absence of new agreement, the rights and duties of the partners also treated in the same way it is treated in the case of partnership at will.
The Limited Liability Partnership (LLP) is an entity registered under Limited Liability Partnership Act, 2008. The liability of an LLP is restricted to its assets and partner’s liability is limited to their share contributed in the partnership. Thus partner’s liability in LLP is similar to that of the shareholders of a Limited company, although they are directly managing the business likes unlimited partnership firm. A partner of LLP, unlike the unlimited partnership, is not liable for wrongful business decisions or misconducts other partner/s.
- Legal rights of minor as a partner
- Active, Sleeping partner & partners of different types
- Legal aspects of partnership business
- Sharing of capital deficiency by the partners (Garner V/s. Murray rule)