Can Minor Become Partner in Partnership firm? | Indian Partnership Act – Judiciary Exams

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CAN MINOR BECOME A PARTNER IN PARTNERSHIP FIRM?

Indian Partnership act, 1932

Section30
MINORS ADMITTED TO THE BENEFITS OF PARTNERSHIP.

(1) A person who is a minor according to the law to which he is subject may not 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.

Section30
MINORS ADMITTED TO THE BENEFITS OF PARTNERSHIP.

(2) Such minor has a right to such share of the property and of the profits of the firm as may be agreed upon, and he may have access to and inspect and copy any of the accounts of the firm.
(3) Such minor’s share is liable for the acts of the firm but the minor is not personally liable for any such act.
(4) Such minor may not sue the partners for an account or payment of his share of the property or profits of the firm, save when severing his connection with the firm, and in such case the amount of his share shall be determined by a valuation made as far as possible in accordance with the rules contained in section 48

Section 48 MODE OF SETTLEMENT OF ACCOUNTS BETWEEN PARTNERS

(4)Provided that all the partners acting together or any partner entitled to dissolve the firm upon notice to other partners may elect in such suit to dissolve the firm, and thereupon the Court shall proceed with the suit as one for dissolution and for settling accounts between the partners and the amount of the share of the minor shall be determined along with the shares of the partners.
(5) At any time within six months of his attaining majority, or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later, such person may give public notice that he has elected to become or that he has elected not to become a partner in the firm, and such notice shall determine his position as regards the firm.
Provided that, if he fails to give such notice, he shall become a partner in the firm on the expiry of the said six months.
(6) Where any person has been admitted as a minor to the benefits of partnership in a firm, the burden of proving the fact that such person had no knowledge of such admission until a particular date after the expiry of six months of his attaining majority shall lie on the person asserting that fact.
(7) Where such person becomes a partner –

(A)his rights and liabilities as a minor continue upto the date on which he becomes a partner, but he also becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership, and

(b) his share in the property and profits of the firm shall be the share to which he was entitled as a minor.
(8) Where such person elects not be to become a partner, –

(a) his rights and liabilities shall continue to be those of a minor under the section upto the date on which he gives public notice;

(b) his share shall not be liable for any acts for the firm done after the date of the notice; and

(c) he shall be entitled to sue the partners for his share of the property and profits

(9) Nothing in sub-sections (7) and (8) shall affect the provisions of section 28.

Bhogilal v. Commissioner of Income-tax

It was held after the attainment of the age of majority when a minor decides to join the firm as a full-fledged partner his share shall remain the same as what was set out in the deed as a minor. It was stated that there is no need to break the continuity when a minor decides to join the firm, therefore a new partnership is not needed.

Commissioner of Income Tax v. Dwarkadas & Co.

the Hon’ble Judge observed that “Section 30 of the Indian Partnership Act, clearly lays down that a minor cannot become a partner, though, with the consent of the adult partners, he may be admitted to the benefits of a partnership. Any document which goes beyond this section cannot be regarded as valid for the purpose of registration.”