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CAPACITY OF THE PARTNERS


Generally everyone is capable of being a partner in a firm.  However as regards infants, although they often carry on business it is risky to deal with them because they cannot be sued for trade debts and can only be made Bankrupt in respect of debts which are legally enforceable against them.  In the event of partnership between an adult and an infant, if the partnership owes debts judgment for such debts will either be against the adult partners alone or preferably against the firm but excluding the infant partner.

In a judgment under any of these forms a receiving order might be obtained against adult partners and in subsequent bankruptcy proceedings partnership assets could be given for distribution to creditors. 

On attaining the age of majority an infant partner could either terminate the partnership in order to escape liability or else he will be equally liable with his adult co-partners.

PERSONS OF UNSOUND MIND

When a person of unsound mind enters into a contract of partnership and afterwards alleges that he was insane at the time and did not know what he was doing, even if he succeeds in proving the allegations the contract is as binding on him in every respect as if he had been sane when he made it unless he can prove further that the person with whom he contracted knew him to be insane so as not to be capable of knowing what he was doing.

Unsoundness of mind therefore is not of itself a bar to enter into partnership and even the subsequent insanity of a partner does not automatically dissolve the partnership but it is a ground for applying to court for dissolution of a partnership.

Upon such application if the court is satisfied that the alleged insane person is actually so, then the court will grant an injunction restraining him from interfering with the business.

 
 
 

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