## Section 29 — Holding Out

### Principle

If a person represents himself (by words spoken/written or by conduct) — or knowingly permits himself to be represented — as a partner in an LLP, he is liable to anyone who, on the faith of such representation, has given credit to the LLP.

### Conditions for Liability

1. There is a representation (express or implied) that the person is a partner of the LLP.

2. Another person, relying on that representation, gave credit to the LLP.

3. It is immaterial whether the LLP itself or the person making the representation actually received the credit.

### Liability of LLP

The LLP that receives such credit is also liable to the extent of the credit received (or any financial benefit derived).

### Death of Partner — Important Exception

Where after a partner's death the business is continued in the same LLP name, this does not by itself make:

The deceased partner's Legal Representative, or
His estate

liable for any act of the LLP done after his death.

### Logic

The section protects creditors who rely in good faith on apparent partnership. It does NOT, however, perpetuate the deceased's estate's liability merely because the LLP name continues.

Worked example

### Example 1

Example: Mr. A is not a partner in XYZ LLP. He tells Bank K, 'I am a partner in XYZ LLP — please extend credit to it.' Relying on this, the bank lends ₹10 lakhs to the LLP. The LLP defaults.

Answer: Mr. A is liable to the bank up to the credit extended (₹10 lakhs) under Section 29(1), even though he was never a partner. The LLP, having received credit, is also liable to that extent.

### Example 2

Example: Mr. P, a partner of LMN LLP, dies on 1st April. The business continues under the same LLP name. On 15th May, the LLP enters into a contract which it breaches.

Answer: Mr. P's legal representatives/estate are NOT liable for the post-death act of the LLP merely because the LLP name continued — Section 29(2).

⚠️ Common exam mistakes

Believing that the person holding himself out must himself receive the credit — actual receipt by him is NOT a precondition.
Assuming the LLP is not liable because it did not consent to the misrepresentation — the LLP is liable to the extent of credit it actually received.
Holding the deceased partner's estate liable merely because the LLP continues to use the same name post-death.

Bare-Act text Section 29 · Limited Liability Partnership Act, 2008 · click to expand

Section 29 — Holding out: (1) Any person who represents himself, or knowingly permits himself to be represented, as a partner of an LLP is liable to any person who has on the faith of such representation given credit to the LLP, whether the person representing himself or represented to be a partner does or does not know that the representation has reached the person so giving credit. The LLP which receives such credit shall also be liable to the extent of credit received. (2) Where after a partner's death the business is continued in the same LLP name, the continued use of that name or of the deceased partner's name shall not of itself make his legal representative or his estate liable for any act of the LLP done after his death.

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Holding Out (Section 29)

Worked example

⚠️ Common exam mistakes