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What is a Nominal Partner?
17. What is a Nominal Partner?
- An invested person who is involved in the daily operations of the partnership.
- A person who provides some of the capital for a business but who does not take an active part in managing the business.
- A person who holds himself out as a partner or permits a partner to hold him out.
- A person who gives an impression to others that he/she is a partner of the firm.
Answer: C) A person who holds himself out as a partner or permits a partner to hold him out
Explanation:
This is a partner that doesn't have any genuine or huge interest in the organization. In this way, he is just loaning his name to the organization. He won't make any capital commitments to the firm, thus he won't have an offer in the benefits by the same token. In any case, the ostensible accomplice will be at risk to untouchables and outsiders for acts done by some other accomplices.