Loading....
Coupon Accepted Successfully!

 

Classification of partnership

A partnership may be classified on the basis of following criteria:
  • On the basis of duration
  • On the basis of the extent of the business

Partnership on the basis of duration

On this basis, the partnership may be of the following two kinds:
  • Partnership at will
    • It is a partnership in which the duration is not fixed and can be dissolved by any one partner at his will at any time
    • When the partnership is not for a fixed period of time or where no provision is made as to when and how the partnership will come to an end, it is carried on at the deliberation and desire of all the partners and can be put to an end at the will of any one of the partners
    • As there is no provision regarding the dissolution of the firm, it may be dissolved by any partner at any time by giving, in writing, a notice of his intention to dissolve the firm. However, the notice should be given to all the partners
    • When a date of dissolution is mentioned in the notice, the firm is dissolved from that date
    • When no date of dissolution is mentioned, the firm is dissolved from the date of communication of the notice
  • Partnership for a fixed period
    • It is a partnership in which the duration is fixed and cannot be dissolved by any partner at his will
    • Such a partnership is dissolved on the expiry of the fixed period
    • However, a partnership for a fixed period can also be dissolved before the expiry of the fixed period by adopting the modes of dissolution
    • If a partnership continues to carry on the business even after the expiry of the fixed period, the partnership becomes a partnership at will
    • The rights and liabilities of the partners remain the same as they were before the expiry of the fixed period. This is, however, subject to an agreement to the contrary i.e., the rights and liabilities may be changed by an agreement between the partners (Sec. 17)

Partnership on the basis of extent of business

On this basis, the partnership may be of the following two kinds:
  • Particular partnership
    • It is a partnership which is formed for the purpose of carrying on a particular venture or undertaking. Example: a partnership for the construction of a particular building, bridge etc.
    • Such a partnership comes to an end on the completion of the particular venture or undertaking
    • If, after the completion of that particular venture or undertaking, the firm continues and proceeds to carry on other undertakings, then it becomes a partnership at will
    • In such cases, the rights and liabilities of the partners in respect of the new venture or undertaking shall be the same as those in the original venture or undertaking. This is, however, subject to an agreement to the contrary i.e. the rights and liabilities may be changed by an agreement between the partners (Sec. 17)
  • General partnership: It is a type of partnership which is formed for the purpose of carrying on business in general like trading, manufacturing, practicing etc.




Test Your Skills Now!
Take a Quiz now
Reviewer Name