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Nominal partner
is nominal partner liable to creditor???
Replies (3)
Quick Summary
A nominal partner is one who allows the use of his/her name by a firm, but does not contribute to its capital. He/she does not take active part in managing the firm, does not share its profit or losses but is liable, like other partners, to the third parties, for the repayments of the firms debts.
So, it's also liable to Creditors also.
So, it's also liable to Creditors also.
Difference between nominal partner and partner with holding out
There are other differences on and above the differences stated above:
1. in normal parlance they are termed as dormant partners.
2. they do not take part in the business actively but certainly has some role.
3. they do not take part in profits and losses but as regards liabilities short term they are liable to some extent.
In case of any deficiencies.
1. in normal parlance they are termed as dormant partners.
2. they do not take part in the business actively but certainly has some role.
3. they do not take part in profits and losses but as regards liabilities short term they are liable to some extent.
In case of any deficiencies.
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