Introduction

Under the Indian Partnership Act, 1932, a minor cannot become a full-fledged partner in a partnership firm because they lack the legal capacity to enter into contracts under the Indian Contract Act, 1872. However, a minor can be admitted to the benefits of an existing partnership with the consent of all partners, as provided under Section 30 of the Indian Partnership Act, 1932.

Rights of a Minor Admitted to the Benefits of Partnership

1. The minor is entitled to a share of the firm's profits as agreed upon.

2. The minor has the right to inspect and copy the accounts of the firm.

3. A minor is not personally liable for the losses of the firm. However, their share in the partnership property and profits may be used to meet such losses.

4. Upon attaining majority, the minor must decide whether to continue as a partner. They have six months from the date of majority or knowledge of the partnership to make this decision. If they choose to become a partner, they assume full rights and liabilities as a partner from the date of the declaration. If they opt out, they are not liable for any acts of the firm beyond their share in the partnership property.

Liabilities of a Minor in a Partnership

1. The liability of a minor is restricted to their share in the partnership property and profits. Their personal assets cannot be used to settle the firm's debts.

2. If a minor decides to remain a partner after attaining majority, they become personally liable for all acts of the firm, including those that occurred while they were a minor.

3. If a minor does not declare their choice within the prescribed six-month period, they are deemed to have elected to become a partner and will bear all liabilities accordingly.

In CIT v. Dwarkadas Khetan & Co. (1961), the Supreme Court held that admitting a minor as a full partner in a firm is invalid. However, a minor can be admitted to the benefits of partnership, reaffirming the provisions of Section 30 of the Indian Partnership Act.

This legal provision balances protecting the minor's interests while allowing the flexibility to include them in family businesses or existing partnerships.