If a particular partner of a firm represents that another person is also a partner of the firm, and if such a person does not disclaim the partnership relationship even after coming to know about it, such person is called :
Partners by holding out
Understanding Partner by Holding Out
The question describes a specific scenario in partnership law where a person is made to appear as a partner by the actions or words of a firm or one of its partners, and that person does not deny the representation even after becoming aware of it. This concept is known as "holding out".
According to the principle of holding out, a person who, by words spoken or written or by conduct, represents himself, or knowingly permits himself to be represented, as a partner in a firm, is liable as a partner to anyone who has on the faith of any such representation given credit to the firm.
Analysing the Given Scenario
In the given situation:
- A partner represents that another person is a partner.
- The other person becomes aware of this representation.
- The other person does not disclaim or deny this partnership relationship.
This sequence of events perfectly fits the definition of being "held out" as a partner and acquiescing to that representation. The person, by not denying the representation, is deemed to have permitted themselves to be held out as a partner.
Why Other Options Are Not Applicable
- Dormant partner: A dormant partner is a partner who is not actively involved in the management of the firm and whose association with the firm is not publicly known. The scenario here is about public representation and lack of denial, which is the opposite of being dormant or secret.
- Partner in profits: A partner in profits is someone who shares in the profits of the firm but is not necessarily involved in management or liable for losses beyond their share of profits (depending on the agreement). The question focuses on the liability arising from being represented as a partner and not denying it, not solely on profit sharing.
- Partner by estoppels: The term "holding out" is often considered a specific application or form of the general principle of estoppel in partnership law. While closely related, "holding out" is the more precise term describing the situation where a person is represented as a partner and doesn't deny it, leading to liability based on that representation. The question's phrasing directly aligns with the definition of "holding out".
Conclusion on Partner Classification
Based on the legal principle of holding out, when a person is represented as a partner and fails to deny it upon learning of the representation, they become liable as if they were a partner to third parties who acted on that representation. Such a person is specifically referred to as a partner by holding out.
Therefore, the person described in the question is called a partner by holding out.
Important Questions from Miscellaneous
A stone is thrown horizontally from the top of a 20 m high building with a speed of 12 m/s. It hits the ground at a distance R from the building. Taking g = 10 m/s2 and neglecting air resistance will give :
A sphere of volume V is made of a material with lower density than water. While on Earth, it floats on water with its volume f1V (f1 < 1) submerged. On the other hand, on a spaceship accelerating with acceleration a < g (g is the acceleration due to gravity on Earth) in outer space, its submerged volume in water is f2V. Then:
A railway wagon (open at the top) of mass M1 is moving with speed v1 along a straight track. As a result of rain, after some time it gets partially filled with water so that the mass of the wagon becomes M2 and speed becomes v2. Taking the rain to be falling vertically and the water stationery inside the wagon, the relation between the two speeds v1 and v2 is :
Consider the following statements:
1. Distance between the longitudes becomes zero on North Pole and South Pole.
2. Distance between the longitudes is maximum on the Equator.
3. Number of longitudes is more than number of latitudes.
Which of the statements given above is/are correct?
One block of 2⋅0 kg mass is placed on top of another block of 3⋅0 kg mass. The coefficient of static friction between the two blocks is 0⋅2. The bottom block is pulled with a horizontal force F such that both the blocks move together without slipping. Taking acceleration due to gravity as 10 m/s2, the maximum value of the frictional force is :
