This section is from the "A Complete Dictionary of Dry Goods" book, by George S. Cole. Also available from Amazon: A complete dictionary of dry goods and history of silk, cotton, linen, wool and other fibrous substances,: Including a full explanation of the modern processes ... together with various useful tables.
Partnership. The relation existing between persons who combine their services, property and credit for the purpose of conducting business for their joint benefit. The written contract of partnership is not, as to outside persons dealing with the firm, conclusive evidence of the partnership of the firm. Even if other persons who do not appear in the articles of partnership can be shown by verbal testimony to be actually members of the firm, their liability is that of partners the same as if they were included in the written articles. According to law, a partner is not entitled unless by special agreement, to any special compensation for his skill, labor or services while employed in the partnership business. He owes these gratuitously for the success and accomplishment of the partnership operations. A managing partner who employs his minor children, with the consent of the other partner or partners, is entitled to compensation for their services. Where an attempt is made, after a dissolution of partnership, to charge with liability a person who has retired from the firm, on the ground that the person or jobber selling goods has never been notified of the dissolution, the evidence of the remaining partner that he has changed his bill and letter heads from the old style to the new style of the firm, and has received checks in payment signed to the new firm name, is sufficient evidence that the transaction was bona fide. A limited partnership is one in which a partner contributes to the common stock a specific sum in cash, and is liable for the debts of the partnership only to the amount of his investment. This privilege usually carries with it the understanding that the limited or special partner shall take no part in the conduct of the business. A general partnership is one in which the relation is not qualified as li?nited or special, and in which, therefore, all the members are jointly liable for all the debts. Dormant or silent partners are persons who are interested in a business, and share its profits and losses, but who are not known to the public as connected with it. If they are discovered, however, they are equally liable as if their names had appeared in the firm. Capitalists frequently advance money to persons of limited means and become dormant partners in the business, taking a share of the profits instead of interest on the money advanced, and appearing as creditors in case of loss or failure of active partner. This is illegal and exposes them to be mulcted for all the liabilities of the firm beyond the assets, as well as losing the capital invested, no matter what agreement is drawn up to the contrary. The capitalist who invests money in this manner must rely on the integrity and capacity of the active partner, for the latter virtually has him in his power. A married woman is as free to enter into a business partnership with her husband as with any one else. If she does so, and the firm incurs liabilities, she has all the responsibility of a partner, and is liable to the creditors for the debts of the firm, even if it consumes the one-third usually allowed out of the husband's assets, in case of his failure.