Question

Distinguish between the following.
Joint Hindu family firm and Joint stock company.

Answer 1

Joint Hindu family firm: It is governed by the Hindu Succession Act, 2005. A HUF is an organization which is carried on by the members of a family. It is controlled by the head of the family known as the karta and the other family members are known as the co-parceners. The karta has the unlimited liability. A person becomes the member of HUF by birth. Even a minor is its member.

Joint Stock Company: It is governed by the Companies Act,2013. It is an artificial person having a separate legal entity and a common seal. It has perpetual succession and the liability of the shareholders is limited to the amount of capital contributed in form of shares by them. It is of two types, viz. Private Co. and Public Co.