Shashwat
Asked February 16, 2014

Minor's Competency

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Are there any circumstances under which a minor can be competent to a contract?Also,can a minor be admitted to a partnership? If yes, also mention his rights, extent of liability and powers.

Answer 1

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Saumya Gupta

A minor is incompetent to contract, under Section of the Indian Contract Act, 2011. However, there are few exceptions laid down. Executed contracts, which are in the interest of the minor, and provide for benefits to the minor and no liabilities, have been accepted as an exception[1].

A minor can be admitted as a partner in a partnership; however, he cannot be a full partner. He can be admitted to benefits only and not to liabilities. All the partners should have consented to the admission of a minor. The consent may be in any form, express or implied; by acquiescence or conduct. A deed making minor a full partner, with equal rights and obligations as the adult partners have been, has been declared void[2].

The minor will not be personally liable for the debts and obligations of the firm, but his share of the profits and property is liable. Also, no capital contribution is important on part of the minor.

A guardian can agree on behalf of the minor for constituting a firm into which a minor would be admitted but not as a full partner, and entitled to only the benefits of the partnership. A guardian can do all necessary to effectuate the conferment and receipt of the benefit of partnership[3].

On attaining majority, he has to make up his mind as to whether he would like to stay in the firm or leave it, for which shall be given a period of six months to decide.

 

[1] Mathai Mathai v. Joseph Mary, ((2015) 5 SCC 622)

[2] CIT v. Dwarkadas Khetan v. Co., (1961) 2 SCR 821.

[3] CIT v. Shah Jathaji Phulchand (1965) 57 ITR 588.

Agree Comment 0 Agrees about 2 months ago

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