Distinguish between the following.
Joint Hindu family firm and Joint stock company
Joint Hindu family firm and Joint stock company
Difference between Joint Hindu Family Firm and Joint Stock Company
Basis of Difference
Joint Hindu Family Firm
Joint Stock Company
Governance
Governed by the Hindu laws.
Governed by the Companies Act 1956.
Number of members
Minimum: 2
Maximum: No limit
In case of a private company:
Minimum: 2
Maximum: 50
In case of a public company:
Minimum: 7
Maximum: No limit
Minor
Minors can be members.
Minors cannot be members.
Management and Control
Managed and controlled by the Karta.
Managed and controlled by the managing director.
Liability
Karta has unlimited liability; other members enjoy limited liability.
Shareholders have limited liability to the extent of the unpaid amount on the shares held by them.
Formation
Easy to form, as few legal formalities need to be fulfilled.
Comparatively difficult to form, as several legal formalities need to be fulfilled.
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Difference between Joint Hindu Family Firm and Joint Stock Company |
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|
Basis of Difference |
Joint Hindu Family Firm |
Joint Stock Company |
|
Governance |
Governed by the Hindu laws. |
Governed by the Companies Act 1956. |
|
Number of members |
Minimum: 2 Maximum: No limit |
In case of a private company: Minimum: 2 Maximum: 50 In case of a public company: Maximum: No limit |
|
Minor |
Minors can be members. |
Minors cannot be members. |
|
Management and Control |
Managed and controlled by the Karta. |
Managed and controlled by the managing director. |
|
Liability |
Karta has unlimited liability; other members enjoy limited liability. |
Shareholders have limited liability to the extent of the unpaid amount on the shares held by them. |
|
Formation |
Easy to form, as few legal formalities need to be fulfilled. |
Comparatively difficult to form, as several legal formalities need to be fulfilled. |
