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To understand Partner by Holding out , first we need to understand difference between Partner by estoppel and Partner by holding out :Partner by estoppel -If a person falsely represents himself as a partner of any firm or

behaves in a way that somebody can have an impression that such person is a partner

and on the basis of this impression transacts with that firm then that person is held

liable to the third party. The person who falsely represents himself as a partner is

known as partner by estoppel. Take an example. Suppose in Ram Hari & Co firm

there are two partners. One is Ram, the other is Hari. If Giri- an outsider represents

himself as a partner of Ram Hari & Co and transacts with Madhu then Giri will be held

liable for any loss arising to Madhu. Here Giri is partner by estoppel.

Partner by holding out -In the above example, if either Ram or Hari declares that Gopal is a partner of their firm and knowing this declaration Gopal remains silent thenGopal will be liable to those parties who suffer losses by transacting with Ram Hari &Co with a belief that Gopal is a partner of that firm. Here Gopal is liable to those parties who suffer losses and Gopal will be known as partner by holding out.
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Q: What is partner by holding out?
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