A person whose behaviour arouses misunderstanding that he is a partner in the firm but actually he is not, is called _________.

nominal partner

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dormant partner

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ostensible partner

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partner by estoppel

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Solution

The correct option is D partner by estoppel
When a partner is not a partner but posses himself as a partner, either by words or in writing or by his acts, he is called a partner by estoppel or holding out. He is liable to an outsider who deals with the firm presuming that the person is a partner. As in reality, he is not a partner, so he does not contribute anything as capital to the firm nor does he share any profit or loss.

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