A partner who after retirement from partnership business loans his capital in the firm and receives interest thereon varying with-profits is known as a quasi partner. He is someone who has ceased being a member of business but has left his or her share capital in the business. He does not share in the profits or losses of the firm.
Such a partner is entitled to receive dues quasi the firm after all outside creditors have been paid in full. He only lends his name and reputation for the benefit of the firm. He is not a real partner of the firm; nevertheless, he gets his share in the form of interest accrued on the loan granted and not a share of profit. He represents himself or knowingly allows himself to be represented as a partner. He is liable for all the debts. The benefit is – it is difficult to bring an action against a company’s members or officers if there has been no breach of the company’s articles of association or other relevant agreement.
- He or she is liable for all debts.
- He or she receives interests in the ratio of their capital.
- Acts like creditors to the business.
- It does not take part in the business’ decision-making process.
- Has a share in the business.