Chief Kalu permitted a newly established commercial firm to use his name on its signboards and business stationery as a senior partner, despite contributing no capital and receiving no share of profits. When the firm defaults on a debt owed to a supplier who extended credit relying on this representation, what is Chief Kalu's legal liability to the supplier?
- He is fully liable for the debt as a partner by holding out.Cevap
- BHe has no legal liability because he contributed no capital to the enterprise.
- CHis liability is limited because he takes no active part in daily business operations.
- DHe is only liable if all other partners are formally declared bankrupt.
Cevap
Chief Kalu is fully liable for the debt to the supplier as a partner by holding out (estoppel).
Under Nigerian commercial law and the Partnership Act, a person who holds himself out (or allows himself to be held out) as a partner is liable as a partner to anyone who has given credit to the firm on the faith of any such representation. Therefore, Chief Kalu is liable to the supplier as a partner by holding out.
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Partner by Holding Out (Estoppel) and Liability to Third Parties
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