Question

Partners in a firm has different roles and liabilities, identify and explain the type of partner in a firm from the given examples: (a) Rama is a partner in a business who has no actual interest in business trade or its profits but she is paid fee by the firm for lending its name to firm. (b) What type of partner is Giri in Ram Hari & Co. Where he is an outsider but represent himself as a partner.

Answer 1

answers are

a) nominal partner

b) partner by estoppel holding out.

hope this will help you.

Answer 2

Answer:

• Rama - Nominal Partner
• Giri - Partner by estoppel

Explanation:

Nominal Partner-

• A nominal partner is a limited or ostensible partner who has no interest in the business or how it makes money.
• They are only interested in the fees they will receive for adding their name as a partner in the business.
• A nominal partner has no ownership in the company and makes no decisions about its operations.
• These nominal partners are the most well-known individuals, businessmen, celebrities, and so on, who agree to have their names added to the company's name in order to increase its goodwill.
• A nominal partner's liability is the same as that of other partners, regardless of the type of company with which he is associated.

Partner By Estoppel-

• A partner by estoppel is someone who, through his or her own initiative, conduct, or behaviour, gives the impression to others that he or she is a partner of the firm.
• Such partners are held liable for the firm's debts because they are considered partners in the eyes of others, even though they do not contribute capital or participate in its management.

Hence, we can conclude that Rama is a nominal partner while Giri is a Partner by estoppel.

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