New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    According to the Partnership Act who is liable as a

    partner in a firm?
    A Only those who have a written partnership agreement Correct Answer Incorrect Answer
    B Anyone who represents himself, or knowingly permits himself to be represented, as a partner Correct Answer Incorrect Answer
    C Only those who have invested a significant amount of capital in the firm Correct Answer Incorrect Answer
    D Only those who actively participate in the day-to-day business operations Correct Answer Incorrect Answer
    E Only those who have official titles such as "Managing Partner" Correct Answer Incorrect Answer

    Solution

    Section28 Holding out:  (1) Anyone who by words spoken or written or by conduct represent himself, or knowingly permits himself to be represented, to be a partner in a firm, is liable as a partner in that firm to anyone who has on the faith of any such representation given credit to the firm, whether the person representing himself or represented to be a partner does or does not know that the representation has reached the person so giving credit. (2) Where after partner's death the business continued in the old firm-name, the continued use of that name or of the deceased partner's name as a part thereof shall not of itself make his legal representative or his estate liable for any act of the firm done after his death.

    Practice Next

    Relevant for Exams: