Family members have full confidence in Karta. Only Karta has the right to deal with foreigners. But other members can only deal with strangers with Karta`s permission. The activities of the common Hindu family are controlled by Hindu law instead of the Partnerships Act. Membership in this form of commercial organization can only be acquired by birth or marriage to a male person who is already a member of the common Hindu family. Common Hindu family businesses consist of common grandparents (ancestors). In a joint family business, only Karta has the implicit power to go into debt and pledge the company`s credit and assets for the ordinary purposes of the company`s business. There are two Schools of Hindu Law – one is Dayabhaga, which is common in Bengal and Assam, and the other is Mitakshara, which is common in the rest of the country. According to the Mitakshara law, there is the right of a son by birth in the property of the common family. This means that when a son is born into the family, he acquires a stake in the property jointly owned by the family. In the common Hindu family business, it is the natural love and affection that the members have for each other. This helps to run the business more efficiently and smoothly.
Karta is the only person who exercises control and direction over the company. He must not consult anyone to make decisions. This ensures quick or quick decisions. As the sole master, he makes quick decisions and seizes the opportunity. All the management functions essential to the proper functioning of a company are provided by the Karta of the family. The Karta may not be able to perform all leadership functions due to limited time, energy and skills. Due to the limited scope of business and limited financial resources, it may not be possible to engage the services of experts in various fields such as purchasing, production and marketing. The death of a member does not affect the existence of the joint Hindu family business. With the exception of Karta, the liability of all other members is limited to their actions. The amount of the debt can also be recovered from his personal property.
This type of business is formed by at least two family members. A company does not need an agreement, because membership is automatically formed by the birth of a new family member. There are no restrictions for minors to become a member of HUF`s company. Every child in the Hindu family becomes a member of the HUF company by birth. The common Hindu family business can be dissolved according to the will of all family members, no member can dissolve the business alone. The liability of HUF members is limited to their share of the company. On the other hand, “Karta” has unlimited liability, so his personal assets can be used to settle the company`s debts. For the success of any business, business is a must. It is well balanced and maintained in the common Hindu family business. The family karta spends money with great caution and economy. The HUF business is fully controlled and managed by the senior member of the “Karta” family, and important decisions of the company are made by the Karta. On the other hand, the other members do not have the right to make decisions in the overall management of the HUF company.
The management of Joint Hindu Family Business is centralized in the hands of Karta family. In this business, Karta makes all decisions and implements them with the help of other members. No other member interferes in its management. The company, which is run by an undivided Hindu family, is called a common Hindu family. This type of business is subject to Hindu law. Therefore, the profit of the company is shared by all members, and this company is controlled by the oldest member of the “Karta” family. The joint hindu family business is controlled and managed by a person called “Karta” or “Manager”. The Karta or manager works in consultation with other family members, but in the end, he has the last word. Karta`s liability is unlimited, while the liability of other members is limited to their actions. The Karta has the freedom to choose any store of its choice. He does not have to rely on others. “When two or more families agree to live and work together, throw away their resources and work with common shares, and share the profits and losses together, then that family is known as the composite family.” Capital is limited to the resources of a family.
This is not enough to meet the company`s expansion requirements. This reduces the size of the company. Karta cannot reap the benefits of significant savings due to limited financial resources. 1) Two male members must be present in the HUF shop. Therefore, a person cannot start this type of business. All the affairs of a common Hindu family are controlled and administered by a person known as a “karta” or “manager”. The Karta is the oldest male member of the family. Family members have full confidence in Karta. Only Karta has the right to deal with foreigners. But other members can only deal with strangers with Karta`s permission.
Membership in the company is limited to family members. No foreigner can become a member of the Joint Hindu Family Business. Belonging to the family can only be acquired through birth. Once a male child is born into the family, he or she becomes a member. Membership does not require any consent or agreement. The management of a common Hindu family business is centralized in the hands of the family`s Karta. No other member may interfere in its management. This can lead to the abuse of power and Karta can use power for its personal interests.
This activity is subject to the Hindu Succession Act 1956, which is governed by Hindu law. Please comment on your comments as you wish. If you have any questions, do not hesitate to contact us by commenting. The main features of huf company are as follows: The joint Hindu family business is controlled and administered in accordance with Hindu law. The death, madness or bankruptcy of a family member has no impact on the existence of the joint Hindu family business. The family continues its activity. Members who share ancestral property and are entitled to receive a share of HUF`s profits are known as Coparceners. 2) Condition related to property inherited from a Hindu family from his great-grandfather. . Family business, Hindu undivided family, organization, types of organization The common Hindu family business is a form of independent organization unique in India. Joint Hindu Family Firm is created by law enforcement.
It does not have a separate legal entity independent of its members. . It is very easy to start the common Hindu family business. No legal formalities are required, such as registration .B. There is no need for an agreement. After reading this article, you will learn more about:- 1. Meaning of the common Hindu family business 2. Characteristics of a common Hindu family business 3. Advantages 4. Disadvantages. Also check out our tutorial on the following topics: In a joint Hindu family business, even a newborn can be a classmate.
In Joint Hindu Family Business, credit facilities are more numerous. One of the reasons for this is that the liability of the “Karta” is unlimited. Karta maintains personal relationships with other people that are also helpful in getting credit. In the common Hindu family business, all decisions are made by the “Karta” himself. He is able to keep all things to himself and maintains absolute secrecy in all matters.. .