Prepared by Assist. Professor Rekha Khandelwal
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Chapter – IV of Partnership Act, 1932
Relations of Partners to third Parties
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Section – 30. Minors admitted to the benefits of partnership.-
According to section
- A person who is minor minor according to Section 11 of the Indian Contract act 1872( no person below the age of 18 years means minor can enter into the contract but Section 30 states that the minor cannot be a partner in a partnership firm but he can be admitted to benefit from the partnership firm.
- Minor has a right to share of the property and to share the profits from the firm. He has also a right to access, inspect and copy any of the accounts of the firm.
- his share is liable for the acts of the firm but minor is not personally liable for any such act.
- Minor cann’t sue the partners for an account or payment of his share of the property or profits of the firm except he is severing his connection with the firm and in this situation the determination of the amount of his share shall be made in accordance with the rules contained in section 48.
Provided, however, that all the partners acting together or any partner entitled to dissolve the firm may choose to sue for the dissolution of the firm after giving notice to other partners and then court shall proceed to settle the case and settle the accounts between the partners, and the share of the minor will be determined with the share of the partners.
- Within the six months of his attaining the age of 18 years or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later, he has to give public notice if he has decided to become the partner or not. But if he fails to give notice he shalll become a partner in the firm
- When any person has been admitted as a minor for the benefits of partnership in a firm, the burden of proving the fact shall lie on the persons asserting that fact,the person (minor) had no knowledge of admission until a particular date after the expiry of six months of his attaining majority.
- If such person becomes a partner,
- as a minor his rights and liabilities continue up to the date on which he becomes a partner, But since he has entered into the benefit of the partnership he is personally responsible to the third party for all the functions of the firm.
- his share in the firm’s assets and profits will be the share to which he was entitled as a minor.
- Where such person elects not to become a partner,
- his rights and liabilities shall continue as a minor under this section up to the date on which he gives public notice,
- he will not be liable for any of the act of firm after the date of the notice,
- he will be entitled to sue the partners for his share in the property and profits according to sub-section (4).
- Nothing in sub-sections (7) and (8) shall affect the provisions of section 28.
In Short There are various rights & Liabilities of Minors-
Various rights of minor is as follows:
- A minor has a right to inspect the books of account
- minor has a right to share the profits from the firm
- A minor has a right to sue any partner or all for his share of benefit or profit if he is severing his connection with the firm
- He has limited liability which means that his personal assets can’t be disposed to pay firm’s debts.
- A minor has a right to become a partner on attaining the age of 18 years.
Liabilities of a minor is as follows:
- A minor limited liability. If a minor is declared bankrupt, his share will remain in the possession of the official liquidator.
- If after attaining the age of 18 years he decided to become the partner. Then he has to give public notice within 6 months of attaining the majority.
- If no notice is given, the minor will be responsible for all other acts until the notice is given.
- When a minor partner becomes the major he will be liable for the acts of all partners to the third parties.
- If he decided to become a full-time partner then he will be considered as a normal partner and will take part in the conduct of the business.