24-10-2016, 09:30 AM
economic and social matters on behalf of the entirefamily and has unlimited liability.The inheritors of the Joint Hindu Family Business arecalled Coparceners·. Their liability is limited.All money goes to the common pool and all propertyis held jointly.There are several schools of Hindu Law, suchMitakshara, the Dayabhaga, the Murumakkattayam,the Aliyasanthana etc.Broadly,
Mitakshara
and
Dayabhaga
systems of laws are very common. Family ties are given moreimportance than marital ties.
FEATURES
•
Organization Existence
:
A joint Hindufamily business exists due to the operation of Hindu law and not out of contract. The rights andliabilities of co-parceners are determined by thegeneral rules applicable in the Hindu law.
•
Membership:
A person born in the family getsan automatic membership of the business andlegality is not affected by the minority of themember. There is no limit to the maximumnumber of members in this type of organization.
•
Registration of Organization:
It is notnecessary to get the business registered
•
Management:
The business is manged andcontrolled by the head or the 'Karta'. He has the power to obtain loans against the family propertyetc. The Co-parceners do not have the power toraise loans or enter into contracts.
•
Liability:
'Karta ' has unlimited liability and theco-parceners have limited liability to the extentof their individual investment in the family business.
ADVANTAGESDISADVANTAGES
Ease of formationApplicable to JointHindu familiesContinuousoperationsLimited capital
Flexibility of operations
Limited managerialtalents
Minimum GovernmentRegulations
Unlimited liability of the Karta
Quick Decision MakingFamily Disputes.
Mitakshara
and
Dayabhaga
systems of laws are very common. Family ties are given moreimportance than marital ties.
FEATURES
•
Organization Existence
:
A joint Hindufamily business exists due to the operation of Hindu law and not out of contract. The rights andliabilities of co-parceners are determined by thegeneral rules applicable in the Hindu law.
•
Membership:
A person born in the family getsan automatic membership of the business andlegality is not affected by the minority of themember. There is no limit to the maximumnumber of members in this type of organization.
•
Registration of Organization:
It is notnecessary to get the business registered
•
Management:
The business is manged andcontrolled by the head or the 'Karta'. He has the power to obtain loans against the family propertyetc. The Co-parceners do not have the power toraise loans or enter into contracts.
•
Liability:
'Karta ' has unlimited liability and theco-parceners have limited liability to the extentof their individual investment in the family business.
ADVANTAGESDISADVANTAGES
Ease of formationApplicable to JointHindu familiesContinuousoperationsLimited capital
Flexibility of operations
Limited managerialtalents
Minimum GovernmentRegulations
Unlimited liability of the Karta
Quick Decision MakingFamily Disputes.