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X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:
- a)Y is a sub-Partner
- b)Y is a dormant partner
- c)Y is a partner by estoppel
- d)Y is a nominal partner
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
X introduces Y to Z as a partner in his business. Y, infact, was not a...
Explanation:
1. Partner by Estoppel:
When a person represents himself as a partner in a business, either by words or conduct, and others rely on this representation and extend credit to the business, the person making the representation (Y in this case) can be held liable as if he were a partner. This is known as a partner by estoppel.
2. Situation in the given scenario:
In the given scenario, X introduced Y as a partner in the business to Z. Even though Y was not actually a partner, he did not deny the statement made by X. As a result, Z believed Y to be a partner and extended a loan to X based on this belief.
3. Legal Implications:
Since Y did not deny being a partner and Z relied on this representation to give a loan to X, Y can be held liable for the repayment of the loan under the principle of partner by estoppel. This means that Y will be treated as if he were a partner in the business for the purpose of repaying the loan.
4. Responsibility of Y:
As a partner by estoppel, Y has a legal obligation to repay the loan taken by X from Z. Even though Y was not actually a partner in the business, his actions led Z to believe otherwise, and therefore he is responsible for the repayment of the loan.
In conclusion, in the given scenario, Y can be held responsible for the repayment of the loan taken by X from Z because of the principle of partner by estoppel. This highlights the importance of being truthful in business dealings to avoid legal liabilities.
1. Partner by Estoppel:
When a person represents himself as a partner in a business, either by words or conduct, and others rely on this representation and extend credit to the business, the person making the representation (Y in this case) can be held liable as if he were a partner. This is known as a partner by estoppel.
2. Situation in the given scenario:
In the given scenario, X introduced Y as a partner in the business to Z. Even though Y was not actually a partner, he did not deny the statement made by X. As a result, Z believed Y to be a partner and extended a loan to X based on this belief.
3. Legal Implications:
Since Y did not deny being a partner and Z relied on this representation to give a loan to X, Y can be held liable for the repayment of the loan under the principle of partner by estoppel. This means that Y will be treated as if he were a partner in the business for the purpose of repaying the loan.
4. Responsibility of Y:
As a partner by estoppel, Y has a legal obligation to repay the loan taken by X from Z. Even though Y was not actually a partner in the business, his actions led Z to believe otherwise, and therefore he is responsible for the repayment of the loan.
In conclusion, in the given scenario, Y can be held responsible for the repayment of the loan taken by X from Z because of the principle of partner by estoppel. This highlights the importance of being truthful in business dealings to avoid legal liabilities.
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X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer?
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X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer?.
X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer?.
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X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of X introduces Y to Z as a partner in his business. Y, infact, was not a partner but he did not deny the statement. Z advanced a loan to X. X could not repay the loan. Z can hold Y responsible for the repayment of loan because:a)Y is a sub-Partnerb)Y is a dormant partnerc)Y is a partner by estoppeld)Y is a nominal partnerCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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