Someone who is not a partner can still be liable for a firm’s debts if they represent themselves, or knowingly allow themselves to be represented, as a partner. Section 14 of the Partnership Act 1890 makes that person liable as a partner to anyone who gave credit to the firm on the faith of the representation. It does not make them a partner for any other purpose, but it can expose their personal assets.

What does section 14 actually say?

Section 14(1) provides that everyone who “by words spoken or written or by conduct represents himself, or who knowingly suffers himself to be represented, as a partner in a particular firm, is liable as a partner to any one who has on the faith of any such representation given credit to the firm”. It adds that this applies whether or not the representation was made or communicated to the creditor by, or with the knowledge of, the apparent partner.

Broken down, a creditor relying on section 14 needs to show:

  1. A representation that the person is a partner in that firm, made in words (spoken or written) or by conduct.
  2. Responsibility for it. Either the person made it themselves, or they knowingly allowed others to make it.
  3. Reliance. The creditor gave credit to the firm on the faith of the representation.

The third point limits the rule. A supplier who never saw the letterhead, website or introduction, or who would have extended credit anyway, cannot use section 14 against the apparent partner. The second point protects people who did not know their name was being used. The ACCA’s partnership factsheet describes the principle as partnership by estoppel: the person is prevented from denying that they were a partner.

Who gets caught by holding out?

The people most at risk are those whose names appear alongside the real partners:

  • Employees given the title of partner. HMRC’s Partnership Manual at PM132100 notes that a salaried partner who is in fact an employee may be given the title for prestige and may even appear on the firm’s notepaper, and that such a person bears liability only to those who advanced credit to the firm believing them to be a partner. The status question is explained in salaried partners: partner or employee.
  • Former partners whose names stay on stationery, signage, websites or engagement letters after they leave.
  • Consultants and figureheads brought in to give a firm credibility or to meet professional rules.
  • Family members named as partners by a relative running the business.
  • Prospective partners introduced to clients as partners before their admission is complete.

What have the courts decided?

The ACCA factsheet summarises two contrasting cases.

In Sangster v Biddulph and Haw (2005), a victim of a mortgage fraud sued a firm of solicitors. Mr Haw argued he was not a partner. He had signed a document called a partnership agreement entitling him to a percentage of fees from one client, and his name appeared on the firm’s letterheads, although he was a partner in another firm and had no direct involvement. The document did not create a partnership in law because he had no share in profits, but the court held that the claimant had been induced to instruct the firm on the basis that it was a two partner firm, and Mr Haw was estopped from denying he was a partner.

In Elite Business Systems Ltd v Huw Price (2005), a father opened a bank account his son could use for a mobile phone business. Without the father’s knowledge, the son told a supplier in writing that his father was a partner. The court found that the father did not know of the representation, so he had not held himself out, and opening the account was not enough to make him a partner.

The contrast shows that knowledge is decisive. Someone who signs documents describing them as a partner, or lets their name go on the letterhead, will struggle to escape liability. Someone whose name was used without their knowledge is protected.

How does holding out interact with retirement, death and bankruptcy?

Holding out sits alongside the rules on apparent partners in section 36:

  • A person dealing with the firm after a change may treat all apparent members of the old firm as still being members until they have notice of the change (section 36(1)). A London Gazette advertisement is notice to people who had no previous dealings with the firm (section 36(2)), but existing customers and suppliers need to be told directly.
  • The estate of a partner who dies or becomes bankrupt, and a retiring partner who was not known to the creditor to be a partner, is not liable for debts contracted after the death, bankruptcy or retirement (section 36(3)).
  • Where the business continues in the old firm’s name after a partner’s death, continued use of that name, or of the deceased partner’s name as part of it, does not of itself make the estate liable for debts contracted after the death (section 14(2)).
  • After dissolution, the firm is not bound by the acts of a partner who has become bankrupt, but anyone who afterwards represented themselves, or knowingly allowed themselves to be represented, as a partner of the bankrupt remains liable (proviso to section 38).

So a retiring partner who leaves their name on the letterhead faces two routes to liability for new debts: section 36 for those who knew them as a partner and were not notified, and section 14 for anyone who relied on the continued representation. The wider steps for leaving cleanly are covered in leaving a partnership and dissolution.

What exactly is the apparent partner liable for?

Section 14 makes them “liable as a partner” to the creditor who relied on the representation. That means the same exposure a real partner has to that creditor for the firm’s debts, which under section 9 is unlimited (see partners’ joint and several liability). It does not give the apparent partner any share of profits, management rights or right to an account from the real partners, and it does not make them liable to creditors who did not rely on the representation.

An apparent partner who pays a firm’s debt will want to recover it from the real partners. Anyone agreeing to be named as a partner without being one should insist on a written indemnity from the real partners before agreeing.

Why does the firm’s paperwork carry so much weight?

GOV.UK guidance on setting up a partnership says the partnership must include all the partners’ names and the business name, if it has one, on official paperwork such as invoices and letters. The ACCA factsheet notes that partnerships of more than 20 people can instead state that a list of partners is available at the principal place of business. Because names on paperwork are the usual way the world learns who the partners are, letterheads, email signatures, websites and proposals are the main evidence in a holding out claim.

How does this work in practice?

Illustration only. An accountancy firm has two equity partners. It promotes a senior manager to “partner” on its website and letterhead, but she remains on payroll with a fixed salary, contributes no capital and has no vote. The firm later collapses owing a software supplier £30,000. The supplier’s account manager says he agreed extended payment terms because the firm presented itself as a three partner practice, and points to the letterhead on the signed order.

The manager is not a partner, but she knowingly allowed herself to be represented as one and the supplier gave credit on the faith of that. She is exposed to the supplier under section 14. A bank that lent to the firm on the strength of the two equity partners’ personal guarantees, without relying on her title, has no section 14 claim against her.

How can people avoid holding out liability?

  • Use titles such as associate, director or principal for people who are not partners, and check that the title does not imply partnership.
  • When a partner leaves, update letterheads, websites, signage, email signatures and engagement letter templates on the leaving date, notify existing contacts directly and consider a Gazette notice.
  • Do not let someone be introduced to clients as a partner before their admission is complete.
  • If a person is named as a partner for professional or regulatory reasons, record their status in writing and obtain an indemnity.
  • Remember that tax follows the facts. HMRC’s manual says the true status of a salaried partner must be determined by examining the facts, so a title alone does not make someone a partner for tax.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.