Question

What is meant by partner by estoppel?

Answer 1

Partner by Estoppel refers to a Legally binding partnership that may arise where, in fact, no formal partnership agreement is in effect. A person who by conduct or words represents, or allows him/herself to be represented, as a partner in a firm is liable for the credit or loans obtained by the firm on the basis of such representation. Also called a presumption of partnership. The partner does not contribute to capital nor does he participate in management but his liability is unlimited.