Article

Kinds of Partnerships | The Indian Partnership Act 1932

Posted by

CA Preeti Aggarwal

On August 13, 2025

0 comments

Kinds of partnerships

When starting a business with others, choosing the right partnership structure is a crucial first step. Partnerships offer a way for two or more individuals or entities to share resources, expertise, profits, and responsibilities. The best structure depends on your business goals, risk tolerance, and how much involvement you want in day-to-day operations. Here are the kinds of partnerships :

Classification on the basis of duration partnership may be either:

Partnership at will [Section 7]
Partnership at will is a partnership in which the duration of partnership is not fixed. It is a partnership for an indefinite period.
Such partnership can be dissolved by any one partner at his will by giving a notice in writing to all other partners of his intention to dissolve the firm.

2) Partnership for a fixed period

Where a provision is made by a contract for the duration of the partnership, the partnership is called ‘partnership for a fixed period’.
It is a partnership created for a particular period of time.
Such a partnership comes to an end on the expiry of the fixed period.
Where a partnership entered into for a fixed term is continued after the expiry of such term, it is to be treated as having become a partnership at will

On the basis of extent of business, partnership may be

1) Particular partnership [Section 8]

Particular partnership is a partnership which is formed for a specific venture.
Such partnership comes to an end on the completion of the venture.
A particular partnership may be dissolved before the expiry of term or completion of venture only by mutual consent of all the partners.

Example : X and Y decided to produce a film together. This is a particular partnership.

2) General partnership:

Where a partnership is constituted with respect to the business in general, it is called a general partnership.
A particular partnership is formed for a particular venture or undertaking whereas, a general partnership is not formed for a particular venture.

For example, let’s say that Fred and Melissa decide to open a baking store. The store is named F&M Bakery. By opening a store together, Fred and Melissa are both general partners in the business, F&M Bakery.

In the case of a particular partnership, the liability of the partners extends only to that particular adventure or undertaking, but in case of general partnership liability of partners is unlimited.