Partnership is based on legal contract
between two persons who agree to share
the profits or losses of a business carried on by them. As such a minor is
incompetent to enter into a valid contract with others, he cannot become a
partner in any firm. However, a minor can be admitted to the benefits of a
partnership firm with the mutual consent of all other partners.
In such cases,
his liability will be limited to the extent of the capital contributed by him and
in
the firm. He will not be eligible to take an active part in the management of
the
firm. Thus, a minor can share only the profits and can not be asked to bear the
losses. However, he can if he wishes, inspect the accounts of the firm. The
status
of a minor changes when he attains majority. In fact, on attaining majority,
the
minor has to decide whether he would like to become a partner in the firm. He
has to give a public notice of his decision within six months of attaining
majority.
If he fails to do so, within the stipulated time, he will be treated as a
full-fledged
partner and will become liable to the debts of the firm to an unlimited extent,
in
the same way as other active partners are.
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