May a Minor Be a Partner?

This post answers the following question: May a minor be a partner (in a partnership legal entity)? It is based on my answer to an Avvo question. Please see In California, can a minor be a partner in a General Partnership?

As initially written, this answer applied solely to California. However, an update, below, discusses applicability to other states.

Minors and Other Business Entities

I previously have written about minors forming other types of business entities.

• May a Minor Form a Corporation? discusses how a minority of states, including California and Delaware, permit a minor to form a corporation.
• By contrast, May a Minor Form an LLC? discusses how most states permit a minor to form a limited liability company.

California Lets a Minor Be a Partner

Corporations Code Section 16101(9) defines a partnership as “an association of two or more persons to carry on as coowners a business for profit….”

In turn, Corporations Code Section 16101(13) defines a person as “an individual, corporation, business trust, estate, trust, partnership, limited partnership, limited liability partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.”

Because the definition of “individual” does not restrict that term to those who have attained the age of majority, a minor may be a partner. (Although these definitions pertain to general partners in general partnerships, there are similar definitions in other statutes that pertain to general and limited partners in limited partnerships.)

Finally, the widespread belief that minors cannot enter into contracts, or that counterparties cannot enforce contracts against minors, is both irrelevant and incorrect.  In California, minors can disaffirm most contracts, but contracts with minors are not void. Please see Contracts with Minors can Lead to Major Problems.

Update August 16, 2015:

California took its definitions of “partnership” and “person” from the Uniform Partnership Act (UPA). The Conference of Commissioners on Uniform State Laws  released the first version of the UPA in 1914. Every state, other than Louisiana, adopted that version of the UPA.

Between 1992 and 2013, the Conference released several revised versions of the UPA. Most states have adopted one of the revised versions.

In each version of the UPA, the definitions of “partnership” and “person” are similar to the definitions provided above. This means that, with the possible exception of Louisiana (which I have not researched), it is likely that a minor may form a partnership in any state.

Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.