Banking · Partnership Accounts
A bank is requested to open a Current Account for a firm whose partners are Mr. X (Major), Mr. Y (Major), and Mr. Z (Minor). The partnership deed states that the firm is established to carry on a legal business. Under the Indian Partnership Act, 1932, what is the legal status of the firm and the bank's correct course of action?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The firm is voidable at the option of the major partners, and the bank should obtain a special undertaking from the majors.
- 2The firm is valid, as a minor can be admitted to the benefits of a partnership, and the bank must open the account but strictly prohibit Mr. Z from operating it.✓
- 3The firm is valid, and the bank must open the account but mandate that all operations are jointly signed by Mr. X and Mr. Y only.
- 4The firm is void ab initio, and the bank must refuse to open the account.
Correct answer
The firm is valid, as a minor can be admitted to the benefits of a partnership, and the bank must open the account but strictly prohibit Mr. Z from operating it.
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