Important rights and liabilities of a minor who has been admitted in the benefits of partnership are given below:
1. The minor is entitled to receive his agreed share of the property and of the profits of the firm.
ADVERTISEMENTS:
2. The minor has the right of inspecting and taking copies of the books of accounts of the firm. He has, however, no such right in respect of books other than accounts, as they may contain secrets which should be restricted to real partners alone.
3. The minor is not personally liable to third parties for the debts of the firm, but his liability is limited only upto his share in the partnership assets and profits.
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If partnership assets fall short in distinguishing the debts of the firm the separate personal property of the minor cannot be applied for payment of the firm debts.
To put it differently, the minor shall be a partner in profits only and shall not share in the losses except when liability to third party has arisen but then too upto his share in the profits and property of the firm.
ADVERTISEMENTS:
4. The minor is not entitled to take part in the conducting of the business as he has no representative capacity to bind the firm.
5. The minor cannot bring about any suit against the partners for an account or payment of his share of the property or profits of the firm except when he severs his connection with the firm.
6. On attaining majority or on knowing that he had been admitted to the benefits of partnership, whichever date is later, the minor must decide within six months whether he would or would not like to become a partner in the firm and give public notice of his decision.
If he remains silent and fails to give such a notice, it will be presumed that he has elected to be a partner in the firm.
ADVERTISEMENTS:
The burden of proving the fact that the minor had no knowledge of his being a partner until a particular date after the expiry of six months of his attaining majority lies on the person asserting that fact.
7. Where the minor becomes a partner either by his own election or by his failure to give notice within the specified time, he becomes personally liable to the third parties for all the debts and obligations of the firm retrospectively from the date of his admission to the benefits of partnership. Of course, his share in the property and profits of the firm shall be the same to which he was entitled as a minor.
8. Where the minor chooses not to become a partner:
(a) His rights and liabilities continue to be those of a minor up to the date of his giving public notice;
(b) His share is not liable for any acts of the firm done after the date of the public notice;
(c) He is entitled to sue the partners for his share of the properly and profits in the firm.
9. If after attaining majority but before choosing to become a partner the minor represents or knowingly permits himself to be represented as a partner in the firm, he will be personally liable to anyone who has on the faith of such representation granted credit to the firm on the ground of ‘holding out’.