1.

Who is a sleeping (dormant) partner? Explain.

Answer»

Sleeping/Dormant partner:

  • A person who becomes the partner in the firm through partnership deed invests capital, bears loss of profit but does not play an active role in managing the business is called a sleeping or dormant partner. Just like the active partners, the liability of the sleeping partner is also unlimited.
  • People who wish to have capital and cannot raise on their own often invites people to join the firm as sleeping partner.


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