can a minor become a Partner in a Partnership Firm?
Section 30 of the Indian Partnership Act, provides that though a minor cannot be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership by an agreement executed through his guardian with the other partners
(a) Minor can become partner for the benefits of the partnership with the consent of all the partners
(b) For admitting minor as a partner, an agreement shall be executed through his guardian Rights of minor in partnership firm Liabilities of minor in partnership firm Right to share profits of the firm Right to share property of the firm Right to inspect accounts of the firm Right to take copy of the accounts Minor is not personally liable However, share of minor in the firm is liable.
(c) There cannot be a partnership consisting of all minors.
Election on majority –
a) On attaining majority, or his obtaining knowledge that he had been admitted to the benefits of partnership; whichever date is later, minor may within six months from such date give public notice that he has elected to a partner in the firm or not.
b) If a minor fails to give such notice, he shall become a partner in the firm on the expiry of the said six months.
| If a minor elects to become a partner | If a minor does not elect to become a partner |
| His rights and liabilities will be similar to those of a full-fledged partner. | His rights and liabilities shall continue to be those of a minor up to the date on which he gives public notice; |
| He will be personally liable for all the acts of the firm, done since he was first admitted to the benefits of the partnership. | His share shall not be liable for any acts of the firm done after the date of the notice; and |
| His share of profits and property remains the same as was before, unless altered by agreement. | He shall be entitled to sue the partners for his share of the property. |
The rights and liabilities of a minor who has been admitted to the benefits of partnership are governed by the following rules:
- The minor is entitled to receive his agreed share of the property and of the profits of the firm.
- The minor has the right of inspecting and taking copies of the books of account of the firm. He has, however, no such right in respect of books other than accounts, as they may contain secrets which should be restricted to the partners alone
- The minor is not personally liable to the debts of 3rd parties for the debts of the firm, but his liability is limited only up to his share in the partnership assets and profits. If partnership falls short in short in extinguishing the debts of the firm the separate person property of the minor cannot be applied for the payment of the debts of the firm.
- The minor is not entitled to take part in conducting of the business as he has not representative capacity to bind the firm.
- The minor cannot bring any suit against the partners for an account or payment of his share of the property or profits of the firm.
- On attaining majority or on knowing that he had been admitted to the benefits of partnership, whichever is later, the minor must decide within 6 months whether he would like to become a partner in the firm and give public notice of his decision. If he remains silent and fails to give such a notice, it will be presumed that he has elected to be a partner in the firm.
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