What is a partner by estoppels?

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A person, who by his words or actions represents himself as a partner, becomes liable to those who advance money or grant credit to a partnership firm on the basis of such repre­sentation. Such a person is called partner by estoppels.

Suppose a rich man, Mohan, is not a partner. But he tells Sohan that he is a partner in a firm called Shipra Enterprises.

On the impression that Mohan is a partner, Sohan gives a loan of Rs. 50,000 to Shipra Enterprises. Later on the firm is unable to repay the loan. Mohan becomes liable to Sohan. Here, Mohan is a partner by estoppels.

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