According to Section 3 of the Indian Majority Act, a person who has not attained the age of majority i.e. 18 years, is known as minor.
A minor cannot enter into a contract according to Section 20 of Partnership Act. A contract with minor is void. Since partnership is a relation resulting from contact, therefore a minor cannot be a partner in a firm.
However, as per Section 30 of Indian Partnership Act though a minor cannot 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 by an agreement executed through his guardian with the other partners.
RIGHTS OF A MINOR PARTNER
A minor enjoys the following rights in a partnership firm –
- The minor is entitled to receive his agreed share of the property and of the profits of the firm.
- Like any other partner, he can inspect the books of accounts of the firm & also demand a copy of the books as well.
- He has the right to sue any or all of the other partners for his share of profits.
- On attaining majority, he has the right to become a partner of the firm as per his will by giving a public notice for the same.
LIABILITIES OF A MINOR PARTNER
The liabilities of a minor in a partnership firm are as follows-
- A minor cannot be held personally liable for the losses of the firm.
- If the minor partner choose to become a partner upon attaining majority he will be liable to all the third parties for the acts done by any and all partners since he was admitted to partnership.
- His share in the property and profits of the firm shall remain the same as it was during his minority
DOCTRINE OF ELECTION
On attaining majority or on knowing that he had been admitted to the benefits of partnership, whichever is later, the minor must decide within 6 months whether he would like to become a partner in the firm and give public notice of his decision.
If such a notice is not given even after 6 months then the minor partner will become liable for all acts done by the other partners till the date of such notice.
However, after the expiry of six months, the BOP (burden of proof) of the fact that minor was not having knowledge as regards to the election is upon the minor itself.