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Partnership Agreement to admit minor as New Partner to the Partnership.

Format of Partnership Deed to admit a minor new Partner to the Partnership Business.

As per Section 30 of the Indian Partnership Act, a minor cannot be a partner in a firm, but, with the consent of all the partners for the time being, a minor may be admitted to the benefits of partnership by an agreement executed through his guardian with the other partners. Such minor may not sue the partners for an account or payment of his share of the property or profits of the firm, save when severing his connection with the firm, and in such case the amount of his share shall be determined by a valuation made as far as possible in accordance with the rules contained in section 48. Such minor's share is liable for the acts of the firm but the minor is not personally liable for any such act.

Sample Format of Partnership Deed to introduce Minor as new partner is given below.

 

PARTNERSHIP DEED

This Agreement is made at this _____ day of _____

Between

Mr. __________________________ son of __________________________, Resident of __________________________of the First Part

Mr. __________________________ son of __________________________ Resident of __________________________ of the Second Part

and

Mr. __________________________son of __________________________ Resident of __________________________of the Third Part

and

Mrs. __________________________ for self and as the natural guardian of her minor son Master __________________________ of the Fourth Part.

Whereas the parties hereto of the First Second and Third Parts have been carrying on business in partnership alongwith Mr. __________________________ In terms of deed of partnership dated _____ entered into by the said partners.

And Whereas the said Mr. __________________________ died on the day of ______ leaving his widow Mrs. __________________________ and a minor son named Master __________________________ as his heirs.

And Whereas the said Mrs __________________________ made a claim for the share of the said Late __________________________ In the assets of the said partnership including goodwill and undistributed profits.

And Whereas the said claim has been settled between the parties hereto of the first, second and third parts and the said Mrs __________________________ and It Is agreed that the said Mrs __________________________ for self and as the natural guardian of the said minor Master __________________________shall be paid a sum of Rupees ______________in full payment of the share of the said deceased partner Late __________________________ In the capital assets including goodwill of the said partnership and that the said Mrs __________________________ shall be admitted to the benefits of the partnerships by paying a share of 5% In the net profits of the firm.

And Whereas the said amount of ________ has been paid to the said Mrs. __________________________ before the execution of these presents partly in cash and partly in securities In the nature of units of the Unit Trust and purchased in the name of the said Mrs __________________________ and the said minor Master __________________________ jointly in order to safeguard the interest of the said Y and the said Mrs __________________________ hereby acknowledges receipt of the said amount in full and declares that she for self and as the natural guardian of the said Master __________________________. has no claim against said firm on account of the share of the said deceased partner Late __________________________.

And Whereas the parties hereto of the first, second and third parts further agree that they hereby admit minor Y to the benefits of the said partnership by paying him a share of 5% in the net profits of the said partnership. He will not be liable to pay any part of the losses of the said firm.

And Whereas the parties of the first, second and third parts agree and declare that they will pay the amount of the said share of the minor Y in the net profits of the firm within three months from the end of the accounting year.

And Whereas it is further agreed and declared that in view of the share given to the said Master __________________________ in the profits of the firm the shares of the partners of the first. second and third parts in the profits of the firm will be readjusted and shall be as follows-

Mr. __________________________'s share will be ____ 35%

Mr. B's share will be ____ 35%

Mr. C's share will be ________ 25%

However the losses of the partnership will be borne by the parties of the first, second and third parts equally.

And Whereas it is further agreed and declared that on the said minor attaining the age of 18 years. he will be admitted as a partner In the said firm if the partnership continues till then, on such terms as may be agreed between all the then partners and the said D but not otherwise.

And Whereas subject as aforesaid the parties of the first, second and third parts will continue to carry on the business in partnership in terms of the said deed of partnership above recited.

And Whereas amendment made by this deed in the constitution and terms of the partnership will be registered as required by the Partnership Act, and the Income Tax Act within the prescribed terms.

IN WITNESS WHEREOF the partners have put their hands the day and year first hereinabove written.

WITNESSES

Mr. ____________________

1.

Mr. ____________________

2.

Mr. ____________________

 

Mrs. ____________________

For self and natural guardian of Master _________
   

Section 30 of Indian Partnership Act 1932

 

Section 30 Minor 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.

(2) Such minor has a right to such share of the property and of the profits of the firm as may be agreed upon, and he may have access to and inspect and copy any of the accounts of the firm.

(3) Such minor's share is liable for the acts of the firm but the minor is not personally liable for any such act.

(4) Such minor may not sue the partners for an account or payment of his share of the property or profits of the firm, save when severing his connection with the firm, and in such case the amount of his share shall be determined by a valuation made as far as possible in accordance with the rules contained in section 48 :

Provided that all the partners acting together or any partner entitled to dissolve the firm upon notice to other partners may elect in such suit to dissolve the firm, and thereupon the Court shall proceed with the suit as one for dissolution and for settling accounts between the partners and the amount of the share of the minor shall be determined along with the shares of the partners.

(5) At any time within six months of his attaining majority, or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later, such person may give public notice that he has elected to become or that he has elected not to become a partner in the firm, and such notice shall determine his position as regards the firm :

Provided that, if he fails to give such notice, he shall become a partner in the firm on the expiry of the said six months.

(6) Where any person has been admitted as a minor to the benefits of partnership in a firm, the burden of proving the fact that such person had no knowledge of such admission until a particular date after the expiry of six months of his attaining majority shall lie on the person asserting that fact.

(7) Where such person becomes a partner -

(a) his rights and liabilities as a minor continue upto the date on which he becomes a partner, but he also becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership, and (b) his share in the property and profits of the firm shall be the share to which he was entitled as a minor.

(8) Where such person elects not be to become a partner, -

(a) his rights and liabilities shall continue to be those of a minor under the section upto the date on which he gives public notice;

(b) his share shall not be liable for any acts for the firm done after the date of the notice; and

(c) he shall be entitled to sue the partners for his share of the property and profits in accordance with sub-section (4).

(9) Nothing in sub-sections (7) and (8) shall affect the provisions of section 28. 

 



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