Distinguish between the following.
Joint Hindu family firm and Sole Trading concern
Joint Hindu family firm and Sole Trading concern
Difference between Joint Hindu Family Firm and Sole Trading Concern
Basis of Difference
Joint Hindu Family Firm
Sole Trading Concern
Members
No limit on the maximum number of members in a family business.
Has only one member (owner).
Continuity
It continues even after the death of the Karta. The next eldest member of the family becomes the Karta.
It comes to an end after the death, lunacy or insolvency of the owner.
Sharing of profits
Profits and losses are shared by the coparceners.
Profits or losses belong to the owner and are not shared with anyone.
Governance
It is governed by the Hindu laws & the Hindu Succession Act 1956.
There is no regulating act.
Liability
Liability of all members is limited, but Karta has unlimited liability.
Liability of the sole proprietor is unlimited.
Decision making
All decisions are taken by the Karta.
All decisions are taken by the sole proprietor.
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Difference between Joint Hindu Family Firm and Sole Trading Concern |
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Basis of Difference |
Joint Hindu Family Firm |
Sole Trading Concern |
|
Members |
No limit on the maximum number of members in a family business. |
Has only one member (owner). |
|
Continuity |
It continues even after the death of the Karta. The next eldest member of the family becomes the Karta. |
It comes to an end after the death, lunacy or insolvency of the owner. |
|
Sharing of profits |
Profits and losses are shared by the coparceners. |
Profits or losses belong to the owner and are not shared with anyone. |
|
Governance |
It is governed by the Hindu laws & the Hindu Succession Act 1956. |
There is no regulating act. |
|
Liability |
Liability of all members is limited, but Karta has unlimited liability. |
Liability of the sole proprietor is unlimited. |
|
Decision making |
All decisions are taken by the Karta. |
All decisions are taken by the sole proprietor. |
