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Question

If the behaviour of a person arouses misunderstanding that he is a partner in a firm(when actually he is not), such a person is estopped from later on denying the liabilities for the acts of the firm. Such person is called ________ and is liable to all third parties.

A
Sleeping partner
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B
Partner by estoppel
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C
Working partner
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D
Sub-partner
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Solution

The correct option is B Partner by estoppel
According to the Partnership Act, a partner by estoppel refers to the partner who verbally or in written or through some conduct represents himself or knowingly permits himself to be represented as a partner in a firm and taking advantage of the goodwill of the firm. These kind of partners are liable to all the third parties arose due to them.

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