Explanation:

A partner who does not contribute capital in the firm and does not actively participate in the working of the business, but allows the firm to use his name along with goodwill is called a "Nominal Partner".

Types of Partnerships:

There are different types of partners in a partnership firm, including:

1. Active Partner: An active partner is one who actively participates in the day-to-day working of the business and contributes capital to the firm.

2. Sleeping Partner: A sleeping partner, also known as a dormant or silent partner, is one who contributes capital to the firm but does not actively participate in the management or operations of the business.

3. Limited Partner: A limited partner is a partner who has limited liability and is not actively involved in the management of the firm. They contribute capital to the business but do not participate in decision-making or day-to-day operations.

4. Nominal Partner: A nominal partner is a partner who does not contribute any capital to the firm and does not actively participate in the business operations. However, their name is used in the firm's name to lend credibility and goodwill to the business.

Role of a Nominal Partner:

A nominal partner does not have any financial stake in the firm and does not contribute capital. They are often individuals with a good reputation in society or have some expertise or influence that can benefit the firm. The main role of a nominal partner is to allow the firm to use their name, which adds credibility and goodwill to the business. This can help attract customers, investors, or other business opportunities.

However, a nominal partner does not have any decision-making power or authority in the firm. They are not involved in the day-to-day operations, management, or decision-making processes of the business. In return for allowing their name to be associated with the firm, they may receive a share of the profits, but this is usually a fixed amount agreed upon in advance and does not depend on the firm's performance.

Conclusion:

In conclusion, a partner who does not contribute capital, does not actively participate in the working of the business, but allows the firm to use their name along with goodwill is called a nominal partner. They play a passive role in the firm and do not have any decision-making authority or financial stake in the business.