Partnerships can be classified on the basis of two factors- duration and liability. On the basis of duration, there can be two types of partnerships: ‘partnership at will’ and ‘particular partnership’. In this type of partnership, the liability of all the partners is unlimited. In such types of partnerships, each partner has an equivalent right to take part in the management of the partnership of the firm.
These types are described in the following sections.
Classification on the basis of duration
(i) Partnership at will: Such types of partnerships are neither for an affixed period not for a particular purpose. This type of partnership exists at the will of the partners. If a partnership deed does not include a clause about the expiration of such a partnership, then the partnership is called a partnership at will. The time period or the purpose of the firm is not mentioned at the time of its formation. Partners continue the business for any length of period depending upon the will of the partners. It can continue as long as the partners want and are terminated when any partner gives a notice of withdrawal from partnership to the firm.
It continues up to the time, the partners have trust in each other. Such a partnership is formed to carry on legal business for an indefinite period. There is no agreement about a fixed period for the existence of a partnership. It can be dissolved by any partner by giving notice to the other partners of his desire to quit the firm. No provision with regards to the determination of a partnership.
(ii) Particular partnership: When a partnership is formed for a certain undertaking or for a certain period, it is called a particular partnership. A partnership formed for the accomplishment of a particular project say construction of a building or an activity to be carried on for a specified time period is called a particular partnership. A partnership formed for the accomplishment of a particular project says construction of a building is called a particular partnership. It is a partnership formed for a specific time period or to achieve a specified objective.
When the work is completed or the period specified expires, the partnership comes to an end. It dissolves automatically when the purpose for which it was formed is fulfilled or when the time duration expires. It can continue as long as the partners want and are terminated when any partner gives notice of withdrawal from partnership to the firm. However, the partners can come to an agreement to continue the said partnership.
