Liability of person representing himself as a partner

(a) When a person, by words spoken or written or by conduct, represents himself, or consents to another representing him to any one, as a partner in an existing partnership or with one or more persons not actual partners, he is liable to any such person to whom such representation has been made, who has, on the faith of such representation, given credit to the actual or apparent partnership, and if he has made such representation or consented to its being made in a public manner he is liable to such person, whether the representation has or has not been made or communicated to such person so giving credit by or with the knowledge of the apparent partner making the representation or consenting to its being made. (1) When a partnership liability results, he is liable as though he were an actual member of the partnership. (2) When no partnership liability results, he is liable jointly with the other persons, if any, so consenting to the contract or representation as to incur liability, otherwise separately. (b) When a person has been thus represented to be a partner in an existing partnership, or with one or more persons not actual partners, he is an agent of the persons consenting to such representation to bind them to the same extent and in the same manner as though he were a partner in fact, with respect to persons who rely upon the representation. Where all the members of the existing partnership consent to the representation, a partnership act or obligation results; but in all other cases it is the joint act or obligation of the person acting and the persons consenting to the representation. (Code 1981, § 14-8-16, enacted by Ga. L. 1984, p. 1439, § 1.) COMMENT Note to Uniform Partnership Act This section provides that where one represents himself or consents to being represented as in partnership with another, he is liable to a relying creditor as if the other were his partner and had all of the agency power of an actual partner. If all of the partners of an existing partnership consent to the representation, a partnership liability results and all are liable as if they were actually in partnership with the represented partner. Otherwise, there is only a joint obligation between the person acting and those consenting to the representation, and the obligation does not bind the existing partnership and its assets. Prior Georgia Law Prior O.C.G.A. § 4-8-1(2) providing for the liability of an ‘‘ostensible partner’’ was generally consistent. New § 14-8-16 clarifies that the ostensible partner is not liable unless he at least consents to the representation of partnership. This reverses Shapleigh Hardware Co. v. McCoy & Son, 23 Ga. App. 265, 98 S.E. 102 (1919). With respect to a purported partner’s agency power to bind the partnership, see The Barnett Line of Steamers v. Blackmar & Chandler, 43 Ga. 98 (1874) and 893 14-8-16 CORPORATIONS & PARTNERSHIPS 14-8-16 Davis v. Citizens’-Floyd Bank & Trust Co., 37 Ga. App. 275, 139 S.E. 826 (1927). There were no prior Code provisions or cases dealing with the effect of the other partners’ lack of consent to the representation or with the rights of creditors of the purported partnership to the assets of a business that is not an existing partnership. Official UPA This section is the same as the official version. Cross-References Rules for determining the existence of an actual partnership: §§ 14-8-6 and 14-8-7. Actual partner’s power to create partnership liabilities: §§ 14-8-9, 14-8-13 and 14-8-14. Nature of partner’s liability for partnership obligations: § 14-8-15. Priorities among creditors of the partnership and of individual partners: §§ 14-8-36(d) and 14-8-40(8)-(9).