Home » MCQs » Commerce MCQs » Partnership MCQs

What is partner by estoppel?

18. What is partner by estoppel?

1. An invested person who is involved in the daily operations of the partnership.
2. A person who provides some of the capital for a business but who does not take an active part in managing the business.
3. A person who holds himself out as a partner or permits a partner to hold him out.
4. A person who gives an impression to others that he/she is a partner of the firm.

Answer: D) A person who gives an impression to others that he/she is a partner of the firm

Explanation:

Assuming an individual holds out to another that he is an accomplice of the firm, either by his words, activities or direct then such an accomplice can't reject that he isn't an accomplice. This fundamentally implies that despite the fact that such an individual isn't an accomplice he has addressed himself accordingly, thus he becomes accomplice by estoppel or accomplice by waiting.