10-02-2017, 02:00 AM
13-02-2017, 12:10 PM
Joint Hindu Family Business is a different type of organisation, found only in India. As its name suggests, it is the type of organisation in which all members of the Hindu Undivided Family manage and control the business with the direction of the head of the family. It is not an association. It is like an association where only members of the family can participate. It is not even an exclusive commercial concern, it is the extension of the only commercial concern in which continuity is guaranteed. The business is carried out from generation to generation. It comes into being by the operation of the Hindu law. It is the result of the Hindu Undivided Family system followed in India. Wherever, there are divided Hindu family, there is the scope of the Hindu common family business.
Joint Hindu Family Business, although it is an expanded form of unique commercial concern, but it enjoys stability. It is recognised by the Income Tax Act of 1961 and by the Joint Indian Succession Act of 1956, but lacks legal status. The status of the Joint Indian Family company and its members is one and the same.
Membership: The affiliation of the Hindu family business is restricted to members of the family only. The members of the family are called "co-parceners". Prior to 1956, female members of the family were not having equal rights with male members, but the Indian Succession Act, 1956, has its provisions for female members as well. The business is controlled by the head of the family called as 'Karta'. Karta and co-recipients are usually male members.
Management: The management of the common Hindu business enterprise is in the hands of the head of the family who is known as "Karta Manager". The Karta has to continue the business with care, it has to protect the interest of the members, it can not obtain secret benefits. Karta has full authority and control over the financial aspects of business. It is called "Property Custodian". He is fully responsible for the risk of the business, his responsibility is unlimited. The responsibility of co-recipients is limited. Co-recipients have to help Karta do the business. Any member is free to separate from the Business of the Joint Indian Family. Generally, the separation of the Joint Indian Family is due to disagreement with Karta's policies and programs.
Joint Hindu Family Business, although it is an expanded form of unique commercial concern, but it enjoys stability. It is recognised by the Income Tax Act of 1961 and by the Joint Indian Succession Act of 1956, but lacks legal status. The status of the Joint Indian Family company and its members is one and the same.
Membership: The affiliation of the Hindu family business is restricted to members of the family only. The members of the family are called "co-parceners". Prior to 1956, female members of the family were not having equal rights with male members, but the Indian Succession Act, 1956, has its provisions for female members as well. The business is controlled by the head of the family called as 'Karta'. Karta and co-recipients are usually male members.
Management: The management of the common Hindu business enterprise is in the hands of the head of the family who is known as "Karta Manager". The Karta has to continue the business with care, it has to protect the interest of the members, it can not obtain secret benefits. Karta has full authority and control over the financial aspects of business. It is called "Property Custodian". He is fully responsible for the risk of the business, his responsibility is unlimited. The responsibility of co-recipients is limited. Co-recipients have to help Karta do the business. Any member is free to separate from the Business of the Joint Indian Family. Generally, the separation of the Joint Indian Family is due to disagreement with Karta's policies and programs.