Partnership deed must specify loss-sharing when a minor enjoys partnership benefits; profit-sharing alone is insufficient for registration.

A partnership deed seeking registration must state how losses are to be borne when a minor is admitted only to the benefits of partnership. A mere profit-sharing clause is insufficient, because the deed must expressly or by necessary implication allocate losses among the adult partners; the minor cannot be made liable for losses, and the instrument must still show the loss-sharing arrangement. On that basis, the firm was not treated as duly constituted for registration, and refusal of registration and continuation of registration was upheld.

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Issues: Whether a firm is entitled to registration and continuation of registration when the partnership deed, though specifying profit-sharing ratios, does not expressly or by necessary implication specify the manner in which losses are to be shared by the adult partners where a minor is admitted to the benefits of the partnership.

Analysis: The instrument of partnership is the basis for determining the terms on which registration is sought. Where a minor is admitted only to the benefits of partnership, the deed must indicate how losses are to be borne by the adult partners, either expressly or by necessary implication. A mere statement of profit-sharing shares does not permit an inference about loss-sharing, because the minor cannot be made liable for losses and the instrument must still disclose how the minor's share of loss is to be distributed among the adult partners. In the absence of any provision dealing with losses, the firm cannot be treated as duly constituted for the purpose of registration.

Conclusion: The Tribunal was justified in refusing registration and continuation of registration to the assessee-firm, as the partnership deed did not specify the shares in losses.

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