Whether a minor become a partner in a firm ? Explain the rights and liabilities of a minor admitted to the benefits of partnership?
Ans. Whether a Minor Become a Partner?–No. According to S. 4 of the Indian Partnership Act, Partnership is the result of a contract and according to S. 11 of the Indian Contract Act, to create valid contract, the parties must be competent. Therefore as a contract with a minor cannot be a valid contract, hence a minor cannot become a partner in the real sense of the term. it was held by Privy Council in Mobil Bibi Vs. Dharmodas Ghosh, that a minors contract is void-ab-initio. S. 30 (1) of the Act, however, lays down that a minor may not be a partner in a firm, but he can certainly be admitted to the benefits of the partnership with the consent of all the existing partners. Sub-sec. 5 of S. 33 again, provides that on attaining majority a minor who has been admitted to the benefits of partnership, may elect to become or not to become a partner in the firm and will give a public notice of his choice. But if he fails to give such a public notice within 6 months of his attaining majority or of his obtaining knowledge that he had been admitted to the benefits of the partnership, whichever date is later, he ipso facto becomes a partner in the firm.
Rights and Liabilities of a Minor—Regarding the rights and liabilities of a minor S. 30 of the Partnership Act provides that-
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.
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 inspect and copy any of the accounts of the firm.
3. Such minor’s share is liable for the acts of the firm out 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 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 rule as contained U/S. 48. Provided that , all the partners acting together or any partner entitled to dissolve the firm upon notice to other partners may act in such suit to dissolve the firm and there upon the court shall proceed with the suit as one for dissolution and for settling accounts between the partner 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 liablities as a minor continue up to 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 the 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 to become a partner–
(a) His rights and liabilities shall continue to be those of a minor under this section up to the date on which he gives public notice.
(h) His share shall not be liable for any acts of 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 in accordance with sub-sec. (4).
9. Nothing in sub-sees. (7) and (8) shall affect the provision of S.28. Thas, where a minor is so admitted to the benefits of partnership his rights and liabilities are as under