POSITION OF MINOR

IN PARTNERSHIP
 CONCEPT

• Capacity to Contract-Section 11 of Indian Contract Act

• Age
• Capacity
• Free Consent

• As Minor is not of Competent Age, he cannot enter into a contract

• As Partners enter into a contract to share profits
• Minors cannot become partners
 Minors admitted to the Benefit of Partnership
[Section 30(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.
 Minor Partner’s Rights During Minority
Sections 30(2) & 30(3)

• 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.
• Such minor’s share is liable for the acts of the
firm, but the minor is not personally liable
for any such act.
Rights of Minor Partner on Dissolution of Firm [Section 30(4)]

• Such minor partner may not sue the other partners for an
account or payment of his share of the property or profits of
the firm, except when severing his connection with the
firm.

• 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.
 Proviso to Section 30(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.
 Option on Attaining Majority
[Section 30(5)]
• At any time within 6 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.

• 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 6
months.
 Consequences of Electing to Become a Partner
[Section 30(7)]
• Where such person becomes a partner,—
• (a) his rights and liabilities 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 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.
Consequences of Electing Not to Become a Partner
[Section 30(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,
• (b) 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-section (4).
 Shivagouda vs Chandrakant
(AIR 1965 SC 212) (Facts)
• In a partnership firm of A and B, Chandrakant (a minor) was
admitted to the benefits of partnership.
• The firm became indebted to the appellant to the extent of
Rs. 1,72,484. On 18th April 1951, the firm was dissolved.
• Subsequently, Chandrakant attained majority but did not
exercise an option under Section 30(5) within 6 months.
• The appellant failed to recover the dues from A and B as they
had become insolvent.
• Hence they filed a case against Chandrakant for the recovery
of this amount.
 Issue Involved
• The issue before the Supreme Court was that if a minor
attains majority after the dissolution of a firm, but fails to
exercise the option under Section 30(5) within 6 months of
attaining majority, can a case be filed against him for the
recovery of money due from a firm?
 Decision
• The Supreme Court held that in this case, Section
30(5) did not apply to Chandrakant (minor) as he
had attained majority only after the dissolution of
the firm.
• Therefore, the debt due from the firm cannot be
recovered from him.
 Summary

• Rights of Minor
• Liabilities of a Minor
• Position of a Minor on attaining majority
 Rights of Minor

• Rights to share Profits

• Right to Access Accounts
• Right to Sue(Severing Connections with the Firm)
• Right to Elect To become or not to become partner on
attaining Majority
 Liabilities of a Minor

• No Personal Liability
• Liability of Minor’s share for acts of Firm
• Partners by Holding Out
 Position of a Minor on attaining majority

• 6 months of Attaining Majority or obtaining

Knowledge of his being admitted to the benefits of
Partnership(whichever is later):
Option:
• To become a partner
• Not to become a partner
 Elects to become a partner

• Share in Profits and property same as he was entitled

as a minor
• His rights and duties as minor continue till becomes a
partner
• Personally becomes liable to third party for all acts of
the firm
 Elects not to become a partner

• His rights and duties as minor continue till gives

public notice
• Share in Profits and property shall not be liable for acts
of firm
• Entitled to sue partners for his share of the property