In some situations, based on your statements and/or conduct, the court will consider you a partner even if you have not actually entered into a partnership agreement

Partnership by estoppel means that a person who is not technically a partner can be held liable as a general partner would be for any debts and damages owed to a third party. 

Am I at Risk of Being Held Liable as a Partner?

Any person who is determined to be a partner will be liable for all partnership debts should the partnership be unable to pay its creditors. You can be held liable as a partner by estoppel if the following has occurred:

  • You gave a third party the impression that you are a partner when you are really not (this can be verbally or implied by your actions), and
  • That third party extended credit, goods or services to the company, based on their belief that you were in fact a partner

Generally a partner by estoppel is created when someone is:

  • Taking an active role by participating in the management of the company, or
  • Permitting the company to use his/her name to do business. 

Should I Contact an Attorney About My Partnership Issue?

If you believe that you are not in fact involved in a partnership and someone is trying to collect from you as a partner, a business attorney with business litigation experience can represent you to protect your rights and interests.