Forms of Business Organisations Test - 4

A secret partner is associated with the business but outsiders have no knowledge about his status in the business. He carries business activities on behalf of other partners and is bound by activities of other partners as well.

A sleeping partner may not contribute in business decision making but is bound by acts of all other partners. He has unlimited liability in business.

Patnership at will continues at the will of all the partners. Business continue till all the partners mutually agree to do so. Business is discontinued when one or more partners wish to withdraw themselves as partners from the business.

In Limited Partnership, the liability of at least one partner is ulimited. All othher partners may have limited liability. Continuity of Limited Partnership does not get affected by thhe death, lunacy or insolvency of the partner with limited liability.  Registration compulsory.

A Partnership Deed/Agreement is a written or oral document which state the financial and non-financial terms and conditions related to functioning of partnership business.

Partnership gets automatically dissolved on the death retirement, insanity or insolvency of any of its partners.  However if the remaining partners desire to continue, then they may do so on the basis of a new agreement.

Partnership business is not bound by any law.  It is not requred to submit or publish their financial results.  Also all the important decisions and major business activities are carried by partners only.  Hence the partnership business is able to maintain confidentiality of information relating to its operations.

The Indian Cooperatives Act 1912 defines Cooperative Societies

"As a society whch has its objectives for the pormotion of economic interest of its members in accordance with cooperative principles."

A sole proprietorship has no legal existence, i.e. in the eyes of the law, no distinction is made between the firm and the proprietor. As a result, owner is held responsible for all the activities of the business.

Mutual agency relationship means each partner is the owner as well as the agent of the firm and agent to other partners. It means, every partner acts in the capacity of an 'agent' as well as a 'principal'.