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Wednesday, 16 March 2011

Position of a minor in partnership firm

The position of a minor in partnership firm and the provision, of law in this respect are given below:

A minor cannot become a partner in the firm:-

1.
But he can admitted to the benefit of partnership business with the consent of all other partners. This can be performed by an agreement executed by his guardian on his behalf with the existing partners of the firm.

2. A minor will be entitled to his agreed share of the property and of the profits of the firm.

3. He is not personally liable for the obligations of the firm but his share in profit and property may be liable for the debts of the firm.

4. He can file a suit for accounts and for his agreed share of property or profit when he severs his connection with the firm.

5. He has a right to inspect and copy books of accounts of the firm.

Position of a minor after attaining maturity:-
Within six months of his attaining maturity, a minor has to decide whether he wants to become full-fledged partner or not. He may give public notice of his consent to become partner.

A. In case of becoming partner:-
After attaining maturity and option to become a partner, his position will be as follows:

1.
He will be personally liable for all obligations of the firm incurred since he was admitted to the benefits of the partnership.

2. The right and liability of the minor after attaining maturity continue to be those of a minor.

3. His interest into his business i.e. share in profit and property of the firm shall be the same which he has got as a minor.

4. He can perform the role of an agent and can bind the other persons by his act.

5. He is entitled to conduct the management of the business.

B. In case of not becoming partner:-
If minor doesn't want to become full-fledged partner after attaining maturity, his position will be as under:

1. He will not be liable for all the debts an obligations of the firm after the date of notice.

2. He has right to sue the partners for his share of the profits in property.

2 comments:

KUTTAN GOPURATHINKAL 15 December 2011 at 07:24  

Pardon me...
A minor becomes a MAJOR. When does one become MATURE ?Even after so long a period of time ?

mohammed raza 17 April 2013 at 06:55  

when he attains an age of 18 years. or 21 in case of guardianship

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