Section 28 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 28 deals with "holding out". Anyone who represents himself, or knowingly permits himself to be represented, as a partner in a firm is liable as a partner to anyone who gave credit to the firm on the faith of that representation. Sub-section (2) adds that continuing to use a deceased partner's name in the firm name does not, by itself, make his estate liable.
A person who, by words spoken or written or by conduct, represents himself, or knowingly permits himself to be represented, to be a partner is liable as a partner to anyone who has given credit to the firm on the faith of that representation (28(1)). It does not matter whether he knows that the representation has reached the person giving credit. After a partner's death, continued use of the old firm name or of his name as part of it does not of itself make his legal representative or estate liable for acts of the firm done after his death (28(2)).
Section 28(1): liability by holding out
The sub-section can be broken into parts. If you are facing a holding-out claim, our legal dispute resolution service can help assess it.
| Part | What the text says |
|---|---|
| Who | Anyone, whether or not he is truly a partner |
| Conduct | By words spoken or written or by conduct, represents himself, or knowingly permits himself to be represented, to be a partner in a firm |
| Reliance | The other person has, on the faith of the representation, given credit to the firm |
| Effect | The person is liable as a partner in the firm to that other person |
| Knowledge | Applies whether or not the person representing himself or represented knows that the representation has reached the person giving credit |
Who can be caught
"Anyone" means the sub-section is not limited to actual partners. It reaches a person who is not a partner at all, and a person who has left but still allows himself to be shown as one.
Two ways of holding out
- He represents himself as a partner, by words, in writing or by conduct, for example by signing letters as "Partner".
- He knowingly permits himself to be represented as a partner, for example by seeing his name on the firm's letterhead as a partner and doing nothing.
Reliance and credit
The liability is to anyone who has, on the faith of the representation, given credit to the firm. So the person must have relied on the representation and must have given credit. The text does not set out the full range of dealings that count as credit.
Knowledge that the representation reached the creditor
The sub-section applies whether or not the person held out knows that the representation has reached the person giving credit. It is enough that the representation was made or permitted and the creditor relied on it.
Example. Ritu retired from "Ritu & Co" last year but her name still appears as "Partner" on the firm's printed brochure. A supplier reads the brochure, finds her name, and supplies goods worth Rs 2 lakh on credit, relying on it. The supplier is not paid. Ritu, having knowingly permitted herself to be represented as a partner, can be held liable as a partner to that supplier.
Link with sections 20 and 25 to 27. Holding out is a separate source of liability from sections 25 to 27, which apply to actual partners; see sections 25 to 27. It also ties in with section 20, which turns partly on whether an outsider believed a person to be a partner; see sections 20 and 21.
Section 28(2): continuing the old firm name after a death
The second sub-section reads: where after a partner's death the business is continued in the old firm name, the continued use of that name or of the deceased partner's name as a part thereof shall not of itself make his legal representative or his estate liable for any act of the firm done after his death.
| Element | Text |
|---|---|
| Event | A partner dies and the business continues in the old firm name |
| Use | The old name, or the deceased partner's name as a part of it, continues to be used |
| Effect | That use does not of itself make his legal representative or estate liable for any act of the firm done after his death |
Points to note:
- "Of itself". The mere use of the name is not enough. The text does not say that other facts could never create liability.
- Only acts after the death. The sub-section covers acts of the firm done after his death. It does not discuss earlier acts.
- Protects the family. The estate of a deceased partner is not drawn in just because the firm keeps trading under a familiar name, for example "Sharma Brothers".
Example. Sharma Brothers continue after Mr Sharma's death with the surviving partners using the same name. A supplier is not paid for goods ordered in the firm's name three months after his death. Under 28(2), the continued use of the name alone does not make his heirs liable for that debt.
What can the deed change?
Section 28 does not open with "subject to contract between the partners". It protects outsiders who relied on a representation, so a private agreement between partners is not stated to affect that protection. What a deed can do is set rules for how partners are shown in public and who must correct it.
Practical points
- Update everything on exit: letterheads, websites, brochures and signboards, and tell customers and suppliers.
- Object in writing if you are named as partner in material you did not authorise.
- Do not describe non-partners as partners.
- Retirement is dealt with in the next Chapter of the Act; see section 32.
Need help with a holding-out claim?
Holding-out claims often come up when a retired partner's name stays on documents, or a person is shown as a partner without being one. If you are facing such a claim or want to protect yourself after leaving a firm, our legal dispute resolution team can help.
Key takeaways
- A person who represents himself, or knowingly permits himself to be represented, as a partner is liable as a partner to those who gave credit to the firm on the faith of it (28(1)).
- It does not matter whether he knows the representation reached the person giving credit.
- After a partner's death, continued use of the firm name or of his name does not of itself make his estate liable for later acts of the firm (28(2)).
- Section 28 is not subject to contract between the partners.
Read next
- Sections 25 to 27: liability of partners and firm for acts and wrongs
- Section 29: rights of a transferee of a partner's interest
- Section 32: retirement of a partner
- Rights of an outgoing partner: goodwill and share
Disclaimer: Based on the text of the Indian Partnership Act, 1932 as consulted on 1 October 2026. Several States have amended the registration chapter and make their own rules, forms and fees for the Registrar of Firms. This article is general information, not legal advice; check the official text and your State's rules before acting.