Liability of minor in partnership
1. Admission to the Benefits of Partnership
A minor may be admitted to the benefits of an existing partnership with the consent of all
adult partners. This admission allows the minor to enjoy the advantages (such as profit-
sharing) without incurring the liabilities of partnership.
Example: A family business admits the 17-year-old child of a partner to share in the yearly
profits; the minor receives a percentage of net earnings but does not participate in
management or bear firm debts.
2. Right to Share in Property and Profits
Once admitted to benefits, the minor has a right to receive a share of the partnership’s
property and profits as if he were a full partner, but only to the extent agreed upon by the
adult partners.
Example: The minor is entitled to 10% of annual profits and 10% interest in the firm’s
goodwill, which is held in trust for him until he comes of age.
3. Right to Access, Inspect, and Copy Accounts
The minor enjoys the same transparency rights as adult partners: he may inspect, examine,
and make copies of the firm’s books and records to verify his share and understand the
financial position of the firm.
Example: The minor engages a chartered accountant to review the firm’s ledgers and
confirm his entitlements before receiving profit distributions.
4. Right to Sue for Accounts upon Severance of Connection
If the minor’s benefits are terminated—either by choice upon attaining majority or by
decision of the adult partners—he has the right to initiate a suit for an account of the firm, to
determine his share of assets and profits to date.
Example: On turning 18, the minor opts out of the arrangement and sues for a detailed
accounting from the date of his admission to the benefits of partnership.
5. Option on Attaining Majority: Election to Become Partner
Upon reaching majority, the minor may elect to become a full partner. If he exercises this
option within six months of majority or a longer period fixed by contract, he becomes liable
for all partnership obligations from that date and retains the share he enjoyed as a minor.
Example: A minor who attained majority on January 1 informs the firm by June 30 of his
choice to continue as a partner; he then begins sharing management duties and liabilities in
line with his profit share.
6. Option on Attaining Majority: Severing Connection
Alternatively, the minor may elect to sever his connection with the firm upon attaining
majority. After a public notice of his decision is issued, he is not liable for any firm debts or
obligations incurred after the notice date. He may also sue the firm and fellow partners for his
share of profits and capital.
Example: A minor turns 18 on March 1 and publishes a public notice on March 15 declaring
he will not become a partner; from that date forward, he is protected from liabilities arising
thereafter and can claim his accumulated share.
7. Immunity from Personal Liability during Minority
During his minority, a minor is not personally liable for any acts or liabilities of the firm.
Creditors cannot hold him responsible or seek to adjudge him insolvent for firm debts; their
claims are limited to the minor’s share of the firm’s assets.
Example: If the firm incurs a loss or debt while the individual is still a minor, creditors can
attach only the portion of assets attributable to the minor’s share; they cannot pursue his
personal property or declare him bankrupt.
