In the earlier issue we have discussed on Section 10 of the Companies Act, 1956 and in the present issue we shall proceed with Section 11 of the Companies Act, 1956 which deals with prohibition of associations and partnerships exceeding certain number.
Query # 1 : In case of partnership which consists of more than 20 persons, can minors be taken into consideration and whether such a partnership can be registered under Income tax act, 1961?
Decided Case Law : CIT vs Suleman Khan and Mahaboob Khan Tobacco Exporters
Facts of the case : The Assessee firm had more than 20 persons including minors during the relevant assessment years and the same having not been registered under the Income Tax Act. Such a partnership was unlawful partnership as per the provisions of section 11 (2)
Clarification : The partnership is a result of the contract between partners and a minor is incompetent to enter into a contract. Only the adult persons who constitute a partnership on the basis of the agreement are to be taken into consideration for finding out whether a partnership consists of more than 20 persons and minors not being partners cannot be taken into account for the purposes of section 11(2).
Conclusion : Held that since the Assessee firm consisted of adult members and three minor members as partners during the relevant assessment years. Hence it was legally entitled to be registered under Rule 22 of Income-tax Rules, 1962.
Query # 2 : A partnership of more than 20 members being illegal, can its partners have the action for the accounts?
Decided Case Law: S.N.T. Kumaraswami Chettiar v.M.S.M. Chinnathambi Chettiar  20 Comp. Cas. 286 (Mad.)
Clarification : As a partnership of more than 20 members is illegal ab initio, there can be strictly speaking, no question of its dissolution or taking of accounts. The court will not assist a person who claims to be a partner of an illegal association to obtain a direction to have the accounts of the business taken so that he may have his share of its profits.
Conclusion : Hence a partnership of more than 20 members being illegal, its partners cannot maintain an action for accounts.