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Which of the following statements is not true about minor’s position in a firm?
- a)He cannot become a partner in an existing firm
- b)He can become a partner in an existing firm
- c)He can be admitted only to the benefits of any existing firm
- d)He can become partner on becoming a major
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Which of the following statements is not true about minor’s posi...
Here, existing firm means any company registered under Companies Act, 2013
Therefore, the provisions of companies act will be applicable and it may not include minor as partner.
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Which of the following statements is not true about minor’s posi...
Understanding Minors in a Firm
In the context of partnership law, minors hold a specific status that restricts their ability to fully engage in partnership activities. Here’s a detailed explanation of why option 'B' is not true.
Minors and Partnership Agreements
- Legal Capacity: Minors, defined as individuals below the age of majority (usually 18 years), lack the legal capacity to enter into binding contracts. This limitation extends to partnership agreements.
- Existing Partnership: A minor cannot become a partner in an existing firm. This is because entering a partnership involves agreeing to the rights and obligations of the partnership, which minors are legally unable to do.
Admission to Benefits
- Benefits of the Firm: While minors cannot be full partners, they can be admitted to the benefits of an existing firm. This means they can share in the profits, but they do not have the authority to participate in management or become liable for debts.
Becoming a Partner Upon Reaching Majority
- Transition to Partnership: Once a minor attains the age of majority, they can choose to become a full partner in the firm. This transition is contingent upon their consent and the existing partnership’s agreement.
Conclusion
In summary, option 'B' is incorrect because it inaccurately suggests that a minor can become a partner in an existing firm, which is not allowed under partnership law. Instead, minors can only enjoy the benefits of the firm until they reach the age of majority, at which point they may become full partners if they wish.
In the context of partnership law, minors hold a specific status that restricts their ability to fully engage in partnership activities. Here’s a detailed explanation of why option 'B' is not true.
Minors and Partnership Agreements
- Legal Capacity: Minors, defined as individuals below the age of majority (usually 18 years), lack the legal capacity to enter into binding contracts. This limitation extends to partnership agreements.
- Existing Partnership: A minor cannot become a partner in an existing firm. This is because entering a partnership involves agreeing to the rights and obligations of the partnership, which minors are legally unable to do.
Admission to Benefits
- Benefits of the Firm: While minors cannot be full partners, they can be admitted to the benefits of an existing firm. This means they can share in the profits, but they do not have the authority to participate in management or become liable for debts.
Becoming a Partner Upon Reaching Majority
- Transition to Partnership: Once a minor attains the age of majority, they can choose to become a full partner in the firm. This transition is contingent upon their consent and the existing partnership’s agreement.
Conclusion
In summary, option 'B' is incorrect because it inaccurately suggests that a minor can become a partner in an existing firm, which is not allowed under partnership law. Instead, minors can only enjoy the benefits of the firm until they reach the age of majority, at which point they may become full partners if they wish.
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Which of the following statements is not true about minor’s position in a firm?a)He cannot become a partner in an existing firmb)He can become a partner in an existing firmc)He can be admitted only to the benefits of any existing firmd)He can become partner on becoming a majorCorrect answer is option 'B'. Can you explain this answer?
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Which of the following statements is not true about minor’s position in a firm?a)He cannot become a partner in an existing firmb)He can become a partner in an existing firmc)He can be admitted only to the benefits of any existing firmd)He can become partner on becoming a majorCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following statements is not true about minor’s position in a firm?a)He cannot become a partner in an existing firmb)He can become a partner in an existing firmc)He can be admitted only to the benefits of any existing firmd)He can become partner on becoming a majorCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is not true about minor’s position in a firm?a)He cannot become a partner in an existing firmb)He can become a partner in an existing firmc)He can be admitted only to the benefits of any existing firmd)He can become partner on becoming a majorCorrect answer is option 'B'. Can you explain this answer?.
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