Estoppel in partnership arises when a person represents themselves as a partner with another, even if no actual partnership exists. Which statement best reflects this?

• A. Estoppel applies only if there is an actual partnership.
• B. Estoppel arises when a person represents themselves as a partner with another, even if no actual partnership exists.
• C. Estoppel requires formal partnership filing.
• D. Estoppel cannot apply to misrepresentation about partnership.

Answer: (B)

Estoppel by partnership exists to protect third parties who deal with a business based on a representation that someone is a partner. If a person represents themselves as a partner with someone else, or allows others to believe they are partners, they can be bound as partners to those dealing with the business—even if no actual partnership exists. The key elements are the representation to a third party, the third party’s reliance on that representation, and the resulting liability or harm. The representation does not have to be formal and a partnership filing is not required. This is why the statement that best reflects the rule is that estoppel arises when someone represents themselves as a partner with another, even if no actual partnership exists.