What are the aims and objectives of Joint Hindu Family business?
What are the aims and objectives of Joint Hindu Family business?
Joint Hindu Family Firm is created by the operation of law. It is governed by the Hindu Succession Act, 1956. In Joint Hindu Family business ‘Karta’ is the decision maker of the business. Joint Hindu family business act was build to empower the traditional business of the Hindu community.
What is a Joint Hindu Family business?
Meaning of Joint Hindu Family Business It refers to a form of business organization which is owned and carried on jointly by the members of the Hindu Undivided Family (HUF). It is also known as Hindu Undivided Family Business.
What are the merits of Joint Hindu Family business?
Merits of Joint Hindu Family Firm:
- Stability: The existence of the Joint Hindu Family firm does not come to an end by the death, insanity, or bankruptcy of any coparcener.
- Management: The organisation, management, and control of the business is vested in the karta of the family.
- Liability:
- Membership:
- Credit worthiness:
What are the main characteristics of HUF?
Features of a HUF
- Formation: To begin a Hindu Undivided Family there must be a minimum of two related family members.
- Liability: The liability of all the various co-parceners is only up to their share of the property or business.
- Control: The entire control of the entity lies with the Karta.
What is the role of Karta in joint Hindu family business?
A Karta is the head of the family who directs the affairs of the family and has decision-making powers on behalf of the HUF. A Karta is the most senior member of the family is like the manager of the joint Hindu family.
What is the disadvantages of joint Hindu family business?
Misuse of Power: The management of a Joint Hindu Family Business is centralised in the hands of Karta of the family. No other member can interfere in his management. This may lead to the misuse of power and the Karta may use the power for his personal interest.
What is joint Hindu family business explain its merits and demerits?
Easy to Start: -Joint Hindu Family business is very easy to form. It comes into existence as per Hindu law. Family members become co-parceners in the firm by virtue of their birth in the family. Moreover no registration is required for a Joint Hindu Family firm respect of minimum or maximum members.
Who comes under HUF?
Hindu Undivided Family (HUF) consists of all persons directly descended from a common ancestor, and also the wives and daughters of the male descendants. For instance, you and your spouse along with your two children can create an HUF and get certain relaxation in computation of taxes.
Who becomes Karta in Joint Hindu Family?
The senior-most male member of the Joint Hindu Family is considered as the Karta of family and he has infinite powers and control over the business. But the main drawback is the unlimited liability associated with the position i.e. his personal assets can be used to payoff the debts, if need arises.
What is the role of Karta in joint Hindu family business give 5 points?
Role of a Karta in HUF The Karta has the power to enter into contracts, issue receipts, enter into compromises, and pay contracts relating to the family business. The Karta has the power to pay family debts partially. The Karta can represent the common family in any legal suit or complaint against the family.
Who can be Karta of Hindu Joint Family?
In a family consisting of the father and his children, father is the Karta when he dies his eldest son becomes the Karta. Thus in a joint family consisting of brothers the eldest brother is the Karta. It is open to the senior member to give up his right of Management. Then one junior to him can become the Karta.
What are the advantage and disadvantage of joint Hindu family?
The Karta cannot take advantage of economies of large size due to limited finance. Unlimited Liability of Karta: The karta has power but he is burdened not only with the responsibility of decision making and management of the business, but also suffers from the disadvantage of having unlimited liability.
What are the merits and demerits of joint family?
Merits and Demerits of Joint Family System in India (1572 Words)
- Division of Labour: Joint family secures the advantages of division of labour.
- Economy in Expenditure:
- Protection from Division of Land:
- Social Security:
- Satisfaction of Basic Needs:
- Rearing of Children:
- Social Virtues:
- Social Control:
Can a person be member of two HUF?
Thus, it is no longer possible to create multiple HUFs. However, this doesn’t mean that a family can not have more than one HUF. It is possible to have a separate HUF with father as the Karta and another HUF with his son or sons as Karta or even with daughters in view of the amendment made in the Hindu Succession Act.
How can I find my HUF member?
Basic criteria for an HUF
- Only one member or co-parcener cannot form an HUF;
- The joint family continues even in the hands of females after the death of the sole male member;
- An HUF need not consist of two male members. One male member is enough. For example, a father and his unmarried daughters may form and HUF.