Holding out

Updated: Aug 20, 2021

This term has particular relevance to partnerships. If one partner leaves and his name is not deleted from the firm’s name, whether on the business firm’s name, whether on the business invoices, orders, etc.), he may remain Hable for all subsequent contracts entered into by the partnership whether he is aware of them or not. This is known as ‘holding out’ and is the reason why changes in the composition of a partnership must be properly advertised both publicly and privately (i.e. to regular supphers or customers). Needless to say, the liability does not arise if the person claiming damages or indemnity is aware of the change. It exists only for the protection of innocent third parties acting in good faith.

Reference: The Penguin Business Dictionary, 3rd edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.