Explain characteristics of Joint Hindu Family Business.

Solution

Characteristics of Joint Hindu Family Business are as follows :

1. Formation :
For a Joint Hindu Family business, there should be at least two members in the family and ancestral property to be inherited by them. The business does not require any agreement as membership is by birth.

2. Liability :
The liability of all members except the Karta, is limited to their share of property of the business. The Karta, however, has unlimited liability.

3. Control :
The control of the family business lies with the Karta. He takes all the decisions and is authorised to manage the business. His decisions are binding on the other members.

4. Continuity :
The business continues even after the death of the Karta as the next eldest member takes up the position of Karta, leaving the business stable. The business can, however, be terminated with the mutual consent of the members.

5. Minor Members :
The inclusion of an individual into the business occurs due to birth in a HUF. Hence minors can also be members of the business.

Some More Questions From Forms of Business Organization Chapter

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Forms Of Business Organization

Explain characteristics of Joint Hindu Family Business.

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