The liabilities of partners and minor

In short, expenses are used to calculate net income. That being said, sub-section 1 [ii] makes it very clear that the minor cannot in any case be a full-fledged partner in a partnership, but can only be admitted to the benefits of a partnership by consent of all the partners.

Also, the income of a minor from a partnership will not be considered for the purpose of income tax. In contrast, analysts want to see that long-term liabilities can be paid with assets derived from future earnings or financing transactions.

He can inspect and take copies of the accounts of the firm. Following this, the Committee did not allow minors to become a partner in a partnership, although they allowed a minor to be admitted to the benefits of a partnership.

Clause a of sub-section 7 states that when a minor becomes a full-fledged partner, such minor will now be held liable not only for the future liabilities of the firm, but will be liable for those obligations also which were incurred by the firm from the date the minor was admitted to the benefits of the partnership.

I Position of minor during minority: This is because, when the minor chooses to become a full-fledged member of the partnership, there is no break in the partnership and it continues as it is.

Rights Of A Minor In A Partnership

This section deals with the rights and liabilities of a minor who is admitted into a partnership and is entitled to the benefits of a partnership. But in the landmark case of Commissioner of Income Tax v. Commissioner of Income Tax, [8] It was held by the High Court of Allahabad that any partnership deed which divides the obligations and rights between the major and minor partners equally will be invalid as it will be in contravention of Section 30 of the Partnership Act because in such a case not only the benefits are given to the minor, but liabilities are also being imposed upon the minor.

Tweet on Twitter In this blog post, Pramit Bhattacharya, a student of Damodaram Sanjivayya National Law University writes about how a minor can become a part of a partnership. A minor can not be declared insolvent. Minors — Admitted only to benefits The general principle which has been laid down in Section 11 [5] of the Indian Contract Act,states that a person has to attain the age of majority and should be of sound mind and not disqualified to enter into a contract to be a competent party.

In the case of H. There was some confusion regarding this proposition of law as in some cases, different high Courts of the country opined that even if a minor is made a full-fledged partner in a partnership firm, the partnership deed is to be interpreted in a liberal manner, and the obligations of the minor will be limited to the extent provided in Section 30 of the Partnership Act.

Right to receive remuneration for conduct of management of the firm. For example, any Cambridge City ordinance that applies to spouses also applies to domestic partners.

Other Definitions of Liability Generally, liability refers to the state of being responsible for something, and this term can refer to any money or service owed to another party.

This is a major departure from English Law, wherein the creditors are in a less favourable position. Section 3 of the aforementioned act makes it clear that eighteen is the age at which a person domiciled in India is deemed to have attained majority.

Thus, the minor in a way becomes retrospectively liable. If he fails to do so, will be considered a major partner. Under sub-section 3 of the provision, it is stated that the minor is liable to the extent of his share in the partnership and cannot be made personally liable for the losses of the firm.

Law regarding minor of becoming partner of firm: What is the Difference Between an Expense and a Liability? Right to be indemnified for any acts done in an ordinary course of business for the best interests of the firm.

Right of being consulted and chance of expression of opinion in the conduct of the business. The minor also continues to enjoy the rights which he enjoyed as a minor till he reaches a decision.

Decisions are taken on the basis of the vote of the majority. If the minor elects not to become a partner, a his rights and liabilities, as between the partners, shall continue the same as before till the date of notice; b his share shall not be liable for the acts of firm after date of the notice; and c he will be entitled to sue his partners for accounts and for payments of his share as mentioned above.

Commissioner of Income-tax [lvii] sub-section 7clause b that there is no break in the continuity of a partnership in the case where the minor elects to become a partner and hence a new partnership does not come into existence.

Qualified Duties Following are the implied duties on the part of partners of the firm unless any contrary is proved:(x) If the minor elects not to become a partner, (a) his rights and liabilities, as between the partners, shall continue the same as before till the date of notice; (b) his share shall not be liable for the acts of firm after date of the notice; and (c) he will be entitled to sue his partners.

Discuss the rights and liabilities of a minor admitted to the benefit of a partnership. 3 Pages. Position of minor in a firm Q. Can a minor become a partner in a firm? Discuss the rights and liabilities of a minor admitted to the benefit of a partnership.

There must be at least two major partners before a minor is admitted for the. Minors admitted to the benefits of partnership (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.

Every partner has some rights in the partnership firm and in the same manner; each partner is liable jointly and severally for all the acts of the firm done by him while he is a partner in a partnership firm. Section 30 of the Indian Partnership Act governs the admittance of a minor into a partnership.

This section deals with the rights and liabilities of a minor who is admitted into a partnership and is entitled to the benefits of a partnership. The rights and liabilities of a minor who has been admitted to the benefits of partnership are governed by the following rules: The minor is entitled to receive his agreed share of.

What are the rights and liabilities of minor partners ? Download
The liabilities of partners and minor
Rated 4/5 based on 4 review