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.
Partnership with a Minor
- A minor can be admitted to the benefits of partnership with the consent of all the existing partners. It should be noted that consent of all the partners is required for a minor to be admitted in a partnership.
- There must be a partnership in existence before a minor can be admitted to its benefits. Thus, a minor cannot form a new partnership but can be admitted in an existing partnership.
- There cannot be a partnership consisting of all minors
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.