Where the authority to a partner is expressly conferred by an agreement, it is called express authority. The firm is liable for all the acts done by such partners, within such authority only.

A person who shares the profit of a firm but does not share the loss, is called 'partner in profit only'. Usually he has no voice in the management of the firm. But his liability to third party is unlimited.

A person who is not really a partner in a business, is described as partner by holding out. Then he must at once deny it when he comes to know about it. If he keeps quiet, then he is liable to persons who do business with that partnership believing that he is also a partner. Such a person is called partner by holding out.

When a person makes an arrangement with a partner to share his profit, he is known as a sub-partner. Such a sub-partner has no rights against the firm, as he is not liable for the debts of the firm.

Secret partner is one whose name is not disclosed to outsiders. The position of secret partner lies between active and sleeping partner. He can take part in the working of the business. He is not known to the public as a partner. He has the same rights and liabilities as that of other partners.

Only persons legally capable of making an agreement can become partners. Lunatics, insolvent, minor cannot become a partner. But, he may be admitted to the benefits of partnership with the consent of all partners.

A partnership is created by an agreement. The agreement may be oral or in writing. It is better to put it in writing to avoid misunderstanding in future.

In the words of Kimball and Kimball, "A partnership or firm as it is often called, is thus a group of men who have joined capital or services for the prosecuting of some business".

(i) When a partner becomes of unsound mind.
(ii) Permanent incapacity observed in its formation, management or in its closure.

The persons who enter into partnership are collectively known as 'Firm'.

Active Partner, Sleeping Partners, Partner in Profits only, Partner by Estoppel.

Property inherited upto 4 generations of male lineage(i.e., father; grandfather etc.) is called ancestral property. The right to a share in such a property accrues by birth itself.

Under the Indian Majority Act, person who has not completed 18 years of age is a minor. However, he will continue to be a minor till he completes 21 years if a guardian has been appointed to the minor. He can be admitted to the benefits of partnership.
Partnership arises as a result of contract. But a minor has no contractual capacity. Though a partnership cannot be created with a minor as a partner, a minor can be admitted to the benefits of a partnership which is already in existence. The consent of all partners is a 'must' for such admission.

i. Sleeping partner contributes capital and shares in the profits or losses of the firm but does not take part in the management of the business.
ii. He may not be known as a partner to the outsiders; yet he is liable to third parties to an unlimited extent as any other partner.
iii. It is also known as Dormant partner.