Partnership Deed to Admit a Minor to the Benefits of Partnership
Section 30 of the Indian Partnership Act, 1932 does not permit a minor to become a partner in a firm. However, with the consent of all existing partners, a minor may be admitted to the benefits of partnership. The deed should therefore describe the minor as a beneficiary of the partnership and not as a full partner.
Sample Partnership Deed Format
The following model preserves the original scenario of three continuing partners, settlement of the deceased partner's share with his legal heirs, and admission of the deceased partner's minor child to the benefits of the continuing partnership.
This Deed is made at on this day of , 20.
BETWEEN
Mr. , son of , residing at , hereinafter referred to as the First Party;
Mr. , son of , residing at , hereinafter referred to as the Second Party;
Mr. , son of , residing at , hereinafter referred to as the Third Party;
AND
Mrs. , residing at , acting for herself and as the natural/lawful guardian of her minor son, Master , hereinafter referred to as the Fourth Party/Guardian.
WHEREAS:
A. The First, Second and Third Parties were carrying on business in partnership with Late Mr. under a partnership deed dated .
B. Late Mr. died on , leaving, among his legal heirs, Mrs. and minor Master .
C. The Fourth Party made a claim concerning the deceased partner's share in the capital, assets, goodwill and undistributed profits of the firm, and the parties have agreed to settle that claim on the terms recorded below.
D. The continuing partners have unanimously agreed, in accordance with Section 30 of the Indian Partnership Act, 1932, to admit minor Master to the benefits of the partnership with an agreed share of 5% of the profits, subject to this Deed and applicable law.
NOW THIS DEED WITNESSES AS FOLLOWS:
1. Settlement of deceased partner's interest. In full and final settlement of the amount agreed to be payable in respect of Late Mr. 's share in the partnership assets, capital, goodwill and undistributed profits, the continuing partners shall pay/have paid a sum of Rs. to the persons lawfully entitled thereto. Receipt of the amount, to the extent already paid, is acknowledged.
2. Admission of minor to benefits. With the consent of all the continuing partners, minor Master is admitted to the benefits of the partnership under Section 30 of the Indian Partnership Act, 1932, with effect from . The minor is not admitted as a partner.
3. Share in profits and property. The minor shall be entitled to a 5% share in the profits of the firm and to such corresponding share in the property of the firm as is agreed under this Deed and recognised by law. The amount credited or payable to the minor shall be dealt with for his benefit in accordance with applicable law.
4. Liability of minor. The minor shall not be personally liable for any act, debt, obligation or loss of the firm. His share in the firm shall, however, be subject to the liability provided by Section 30(3) of the Indian Partnership Act, 1932.
5. Accounts. The minor shall have the statutory right to access, inspect and copy the accounts of the firm as provided by Section 30(2). Nothing in this Deed shall be interpreted as conferring management authority on the minor during minority.
6. Payment/credit of profit share. The minor's share of net profits shall be credited to an account maintained for his benefit or paid/applied for his benefit in the manner lawfully agreed. Subject to applicable law and the accounts of the firm, such credit or payment shall ordinarily be made within three months from finalisation of the accounts for the relevant accounting period.
7. Revised profit-sharing ratio. After admitting the minor to the benefits of the partnership, the profit-sharing arrangement shall be:
First Party: 35%
Second Party: 35%
Third Party: 25%
Minor Master - benefits of partnership only: 5%
8. Losses. Any losses required to be borne personally by partners shall be borne by the First, Second and Third Parties in the ratio mutually agreed by them and stated in the governing partnership deed or this Deed. The minor shall not be personally responsible for the firm's losses.
9. On attaining majority. Upon the minor attaining majority, or obtaining knowledge of his admission to the benefits of the partnership, whichever is later, his rights, election and liabilities shall be governed by Section 30(5) to (9) of the Indian Partnership Act, 1932. The partners and the person attaining majority shall make such public notice, filings and consequential amendments to the partnership instrument as the law requires.
10. Continuation of firm. Except to the extent modified by this Deed, the continuing partners shall carry on the business in accordance with the existing partnership deed and applicable law.
11. Registration and statutory filings. The partners shall make or update entries, statements and filings with the Registrar of Firms and other competent authorities wherever applicable. They shall also comply with the Income-tax Act, 2025 and other tax laws applicable to the firm, including requirements relating to the partnership instrument and the specified shares of partners.
12. Governing law. This Deed shall be read subject to the Indian Partnership Act, 1932, the Majority Act, 1875, applicable State amendments/rules, applicable stamp law, the Income-tax Act, 2025 and other laws in force.
IN WITNESS WHEREOF, the adult parties have signed this Deed on the date and place first written above. The guardian signs for the limited purposes stated in this Deed and in relation to the minor's lawful interests.
Witnesses
Section 30 of the Indian Partnership Act, 1932 - Minors 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, except when severing his connection with the firm. In that event, his share is determined, as far as possible, in accordance with the valuation rules referred to in Section 48, subject to the proviso contained in Section 30(4).
(5) Within six months of attaining majority, or of obtaining knowledge that he had been admitted to the benefits of partnership, whichever is later, the person may give public notice electing to become or not to become a partner. If the required notice is not given, the statutory consequence stated in Section 30 applies.
(6) Where a person was admitted as a minor to the benefits of a firm, the burden concerning a claim that he acquired knowledge only on a later date is governed by Section 30(6).
(7) If the person becomes a partner, his rights and liabilities as a minor continue up to the date on which he becomes a partner; thereafter the additional rights and liabilities specified in Section 30(7) apply.
(8) If the person elects not to become a partner, his rights and liabilities continue as provided in Section 30(8) up to the date of public notice, and his share ceases to be liable for later acts of the firm as stated in that provision.
(9) Section 30(9) preserves the operation of Section 28 concerning holding out.
Current Legal Notes for 2026
Age of majority: under Section 3 of the Majority Act, 1875, a person domiciled in India generally attains majority on completing 18 years. The statutory election under Section 30 of the Partnership Act should therefore be considered when the admitted minor attains majority.
Registration of the firm: the Partnership Act contains consequences for non-registration, particularly under Section 69. Because registration procedure and forms are administered at State level, the deed should not use a blanket statement that registration is mandatory in every situation; instead, the partners should complete the applicable Registrar of Firms filings and update the firm's particulars when required.
Income-tax position: from 1 April 2026, the Income-tax Act, 2025 is in force. Section 325 provides, among other things, that for assessment as a firm the partnership must be evidenced by an instrument and the individual shares of partners must be specified in that instrument. The older wording about obtaining -registration under the Income-tax Act- should therefore not be used.