Partnership can be classified on the basis of:
Classification on the basis of duration:
(i)Partnership at will : The existence of this partnership depends on the will of the partners. The business of the firm continues as long as the partners desire and is terminated when any partner gives a notice for dissolution of the firm.
(ii)Particular partnership : It is the partnership which is formed for completing only a particular project or any activity to be carried on for a specified period of time only. This partnership is automatically dissolved on completion of the project or activity.
Classification on the basis of liability:
(i)General partnership: The partnership in which the liability of the partners in unlimited is called general partnership. In this type of partnership, partners have the right to take part in the management of the firm. Each partner as well as the firm is bound by the acts of all the partners. It is optional for the firm to get itself registered. Death, insolvency, retirement or lunacy of any partner adversely affects the existence of the firm.
(ii)Limited partnership : Limited partnership is the partnership in which the liability of at least one member is unlimited while others have limited liability. The members with limited liability neither have the rights to participate in the management of the business nor are their acts binding on other partners or the firm. It is compulsory to register such partnership.