Indian Partnership Act 1932 - Part 4 - Position of Minor for CA-CPT (in Hindi)

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• published: 14 Apr 2016
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Minor Admitted to the Benefits of Partnership- Provisions, Rights and Duties 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 and inspect and copy any of the accounts of the firm. 3. Such minor's share is liable for the acts of the firm but the minor is not personally liable for any such act. Such minor may not sue the partners for an account or payment of his share of the property or profits of the firm, but 4. When severing (separating) his connection with the firm, the amount of his share shall be determined by a valuation made in accordance with the rules contained in section 48 (Mode of settlement of Accounts between partners). Further, when all the partners acting together, or any partner entitled to dissolve the firm upon notice to other partners (partnership at will), may elect in such suit to dissolve the firm, and thereupon the Court shall proceed for dissolution and for settling accounts between the partners, Then 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 : But 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 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. 8. Where such person elects not be to become a partner, - (a) his rights and liabilities shall continue to be those of a minor under the section up to the date on which he gives public notice; (b) his share shall not be liable for any acts for 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. 9. Nothing in sub-sections (7) and (8) shall affect the provisions of section 28 (Partners by Holding Out). Partner by holding out (Section 28): Partnership by holding out is also known as partnership by estoppel. Where a man holds himself out as a partner, or allows others to do it, he is then stopped from denying the character he has assumed and upon the faith of which creditors may be presumed to have acted. When a person (1) represents himself, or (ii) knowingly permits himself, to be represented as a partner in a firm (when in fact he is not) he is liable, like a partner in the firm to anyone who on the faith of such representation has given credit to the firm. Suit filed by partnership firm & Partners - Death of one partner does not abate the entire suit.