Sleeping partner

The Indian Partnership Act

 Sleepin Partner is the term explained in mant Corporate Laws... such as Incometax Act, Insolvency Act, Contract Act, etc...

NANDKUMAR B.SAWANT.,M.COM.LL.B.(MUMBAI),ADVOCATE

MOBILE.09325226691, 09271971251

e.mail.adv.nbsawant@yahoo.co.in

e.mail.nandkumarbs@sify.com

REGARDING THE QUESTION ASKED ABOUT THE TERM.SLEEPING PARTNER. KINDLY NOTE THAT

1.KINDLY NOTE THAT SLEEPING PARTNER IS A TERM USED IN INDIAN PARTNERSHIP ACT.

2.SLEEPING PARTNER IS  A PARTNER IN THE PARTNERSHIP WHO IS NOT TAKING ANY ACTIVE PART IN THE DAY TO TODAY FUNCTIONING OF THE PARTNERSHIP.

IN CASE YOU NEED ANY FURTHER DETAILS YOU MAY REFER THE SAID ACT..

KINDLY WRITE IN CASE YOU NEED ANY FURTHER HELP.

WITH BEST REGARDS

THANKING YOU

NANDKUMAR B. SAWANT.,M.COM.LL.B.(MUMBAI)ADVOCATE

NANDKUMAR B.SAWANT.,M.COM.LL.B.(MUMBAI),ADVOCATE

MOBILE.09325226691, 09271971251

e.mail.adv.nbsawant@yahoo.co.in

e.mail.nandkumarbs@sify.com

REGARDING THE QUESTION ASKED ABOUT THE TERM.SLEEPING PARTNER. KINDLY NOTE THAT

1.KINDLY NOTE THAT SLEEPING PARTNER IS A TERM USED IN INDIAN PARTNERSHIP ACT.

2.SLEEPING PARTNER IS  A PARTNER IN THE PARTNERSHIP WHO IS NOT TAKING ANY ACTIVE PART IN THE DAY TO TODAY FUNCTIONING OF THE PARTNERSHIP.

IN CASE YOU NEED ANY FURTHER DETAILS YOU MAY REFER THE SAID ACT..

KINDLY WRITE IN CASE YOU NEED ANY FURTHER HELP.

WITH BEST REGARDS

THANKING YOU

NANDKUMAR B. SAWANT.,M.COM.LL.B.(MUMBAI)ADVOCATE

NANDKUMAR B.SAWANT.,M.COM.LL.B.(MUMBAI),ADVOCATE

MOBILE.09325226691, 09271971251

e.mail.adv.nbsawant@yahoo.co.in

e.mail.nandkumarbs@sify.com

REGARDING THE QUESTION ASKED ABOUT THE TERM.SLEEPING PARTNER. KINDLY NOTE THAT

1.KINDLY NOTE THAT SLEEPING PARTNER IS A TERM USED IN INDIAN PARTNERSHIP ACT.

2.SLEEPING PARTNER IS  A PARTNER IN THE PARTNERSHIP WHO IS NOT TAKING ANY ACTIVE PART IN THE DAY TO TODAY FUNCTIONING OF THE PARTNERSHIP.

IN CASE YOU NEED ANY FURTHER DETAILS YOU MAY REFER THE SAID ACT..

KINDLY WRITE IN CASE YOU NEED ANY FURTHER HELP.

WITH BEST REGARDS

THANKING YOU

NANDKUMAR B. SAWANT.,M.COM.LL.B.(MUMBAI)ADVOCATE

i do not remember any specific provision defining the term sleeping partner. would any of my friends cite the provision, if any ?

The Indian Partnership Act

 There is no word "sleeping" in the Indian Partnership Act, 1932. People loosely refer it. 

Certain writer has elaborated the various kinds of partners in these words. But that is not law.

Depending on the reason behind which a particular partnership is made, partners may be of different types. To understand this better, consider the following:

Active partners:

The partners who actively participate in the day-to-day operations of the business are known as active partners. They contribute capital and are also entitled to share the profits of the business. They also share the losses that the business faces.

Dormant partners:

Those partners who do not participate in the day-to-day activities of the partnership firm are known as dormant or “sleeping partners”. They only contribute capital and share the profits or bear the losses, if any.

Nominal partners:

These partners “only” allow the firm to use their “name” as a partner. They “do not” have any real interest in the business of the firm. They do not invest any capital, or share profits and also do not take part in the business of the firm. However, they do remain liable to third parties for the acts of the firm.

Minor as a partner:

In special cases a minor can be admitted as partner with certain conditions. A minor can only share the profit of the business. In case of loss his liability is limited to the extent of his capital contribution for the business.

As per Indian Partnership Act.1932, Sleeping Partner is one of the different kinds of partners of a partnership business firm. A sleeping partner is a partner who does not take any active part in the management of the firm. The patners who will take active part in the management of the business, are mentioned in the partnership deed. The rights and liabilities of the partners are stated in the Deed itself. The sleeping partner bears the same rights and liabilities as active partners, simply, he does not take active part in the management of the firm. In case of contrary, the Indian Partnership Act 1932 will be followed.

Dr. Tripathi's observation still begs the question. If the term sleeping partner is defined in Indian Partnership Act, surely there ought to be some section which defines it. Which section?

A sleeping partner is reffered as dormant partner in the Indian Partnership Act..

"DORMANT" means lying inactive or Sleeping.

Let us not give it our own interpretation. Courts might have also used the words "sleeping partner". But, from where have these words come? Certainly they ought to be mentioned in law. Which law? Let us not give our own definition.

I am not sure but just clarifying my doubt, it is necessary to mention sleeping partner in partnership deed. If not then how and where to mention sleeping partner in document.

Even Supreme Court in Krishnan Nair & Anr. Etc vs Ghouse Basha on 8 September, 1987