Tuesday, 23 May 2017

The Partnership Business

Hello readers, today I will be writing about a partnership business. A partnership business is a form of business that is owned by two or more individuals, these individuals are called partners. Profit are shared amongst these partners in a way that it had been agreed upon. Profit-sharing should be agreed upon before starting the business.

It could be shared in a way that capital was contributed by each party or in a way each partner contributes in the management of the business. Capital can be raised from their personal savings or from family or from friends. There are various types of partners, however, the major ones will be discussed below

Active Partner
This is the individual who takes on the major role of managing the daily activities of the business. He/ she is responsible for the actions of the business.

Sleeping Partner
This individual only contributes capital to the business and does not participate in managing the activities of the firm. However, he/she partakes in sharing the profit and losses of the business. His/her relationship with the firm is not known to the general public.

Nominal Partner
This is an individual whose name is used in the business after permission has been taken from him or her, in other words the individual lends his/her name to the business. He/she does not contribute capital or partake in sharing the profit or losses of the business. He/she does not participate in managing the business.

That is all for today, keep checking out my blog. Cheers!

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