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CPT Law Minor's status in Partnership Firm

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CPT Law Minor's status in Partnership Firm

  1. 1. [MINOR’S STATUS IN A PARTNERSHIP FIRM] December 13, 2010 MINOR’S STATUS IN A PARTNERSHIP FIRM A Minor cannot become a partner of a firm since he does not have the capacity to contract however he can be admitted for the benefits of partnership with the consent of all the partners.  Rights and Liabilities of minor  Before attaining maturity: 1. He has right to take share of profit, agreed by all partners. 2. Right to access, inspect and copy any of the accounts of the firm. 3. His liabilities in the firm are limited to the extent of his share in the firm. He is not personally liable. 4. He has no right to sue against other partner for profit or accounts, but may sue for separation. 5. He cannot adjudicate as an insolvent, but, if the firm becomes insolvent the property of minor shall be transferred to the Official assignee.  After attaining maturity: Within 6 months of his attaining date of maturity, or within knowledge that he had been admitted to the benefits of partnership, Whichever date is later, the minor may give public notice that he has elected to become or that he has elected not to become a partner in the firm. If he does not do so, he shall become a partner of the firm on the expiry of the said six months.vxplain 2 score more-- post your doubts to us at vxplain@gmail.com Page 1
  2. 2. [MINOR’S STATUS IN A PARTNERSHIP FIRM] December 13, 2010  If he elects to become a partner or becomes a partner by failing to notice otherwise: a. His right and liabilities for profit & property will continue up to date of elected as a partner. But he will be personally liable for these acts, which was previously done by the firm. b. His share of profit & properties will remain same as before.  If he elects not to become a partner: a. His rights and liabilities will continue up to notice. b. He will not liable for any act done by the firm after such notice. c. He can sue for his share of profit & properties d. If he acts as holding out, he will be liable under prescribed methodvxplain 2 score more-- post your doubts to us at vxplain@gmail.com Page 2

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