Long Answer Type Questions :
Explain the meaning and features of Joint Hindu Family Business.
Explain the meaning and features of Joint Hindu Family Business.
Meaning
of Joint Hindu Family Business:
The Joint Hindu
Family Business is a distinct form of organisation peculiar to India. Joint
Hindu Family Firm is created by the operation of law. It does not have any
separate and distinct legal entity from that of its members.
The business of
Joint Hindu Family is controlled under the Hindu Law instead of Partnership
Act. The membership in this form of business organisation can be acquired only
by birth or by marriage to a male person who is already a member of Joint Hindu
Family.
“When two or more
families agree to live and work together, throw their resources and labour with
joint stock and share profits and the losses together, then this family is
known as composite family.”
There are two schools of
Hindu Law-one is Dayabhaga which is prevalent in Bengal and Assam and the other
is Mitakshara prevalent in the rest of the-country. According to Mitakshara
law, there is a son’s right by birth in the property of joint family. It means,
when a son is born in family, he acquires an interest in the property jointly
held by the family.
The business of
the Joint Hindu Family is controlled and managed by one person who is called
‘Karta’ or ‘Manager’. The Karta or manager works in consultation with other
members of the family but ultimately he has a final say. The liability of Karta
is unlimited while the liability of other members is limited to their shares in
the business.
Characteristics
of a Joint Hindu Family Business:
The main characteristics of Joint Hindu Family
Business are given below:
1. Governed by Hindu Law:
The business of the Joint
Hindu Family is controlled and managed under the Hindu law.
There are two schools
of Hindu law:
(i) Dayabhaga, and
(ii) Mitakshara.
2. Management:
All the affairs of
a Joint Hindu Family are controlled and managed by one person who is known as
‘Karta’ or ‘Manager’. The Karta is the senior most male member of the family.
He works in consultation with other members of the family but ultimately he has
a final say.
The members of the
family have full faith and confidence in Karta. Only Karta is entitled to deal
with outsiders. But other members can deal with outsiders only with the
permission of Karta.
3. Membership by Birth:
The membership of the family
can be acquired only by birth. As soon as a male child is born in family, he
becomes a member. Membership requires no consent or agreement.
4. Liability:
Except the Karta,
the liability of all other members is limited to their shares in the business.
The Karta is not only liable to the extent of his share in the business but his
separate property is equally attachable and amount of debt can be recovered
from his separate property.
5. Permanent Existence:
The death, lunacy
or insolvency of any member of the family does not affect the existence of the
business of Joint Hindu Family. The family goes on doing its business.
6. Implied Authority of Karta:
In a joint family
firm, only Karta has the implied authority to contract debts and pledge the
credit and property of the firm for the ordinary purpose of the businesses of
the firm.
7. Minor also a Partner:
In a partnership,
minor cannot become co-partner though he may be admitted to the benefit of
partnership. In a Joint Hindu Family firm minor is a partner.
8. Dissolution:
The Joint Hindu
Family Business can be dissolved only at the will of all the members of the
family. Any single member has no right to get the business dissolved.
Meaning of Joint Hindu Family Business:
The Joint Hindu Family Business is a distinct form of organisation peculiar to India. Joint Hindu Family Firm is created by the operation of law. It does not have any separate and distinct legal entity from that of its members.
The business of Joint Hindu Family is controlled under the Hindu Law instead of Partnership Act. The membership in this form of business organisation can be acquired only by birth or by marriage to a male person who is already a member of Joint Hindu Family.
“When two or more families agree to live and work together, throw their resources and labour with joint stock and share profits and the losses together, then this family is known as composite family.”
There are two schools of Hindu Law-one is Dayabhaga which is prevalent in Bengal and Assam and the other is Mitakshara prevalent in the rest of the-country. According to Mitakshara law, there is a son’s right by birth in the property of joint family. It means, when a son is born in family, he acquires an interest in the property jointly held by the family.
The business of the Joint Hindu Family is controlled and managed by one person who is called ‘Karta’ or ‘Manager’. The Karta or manager works in consultation with other members of the family but ultimately he has a final say. The liability of Karta is unlimited while the liability of other members is limited to their shares in the business.
Characteristics of a Joint Hindu Family Business:
The main characteristics of Joint Hindu Family Business are given below:
1. Governed by Hindu Law:
The business of the Joint Hindu Family is controlled and managed under the Hindu law.
There are two schools of Hindu law:
(i) Dayabhaga, and
(ii) Mitakshara.
2. Management:
All the affairs of a Joint Hindu Family are controlled and managed by one person who is known as ‘Karta’ or ‘Manager’. The Karta is the senior most male member of the family. He works in consultation with other members of the family but ultimately he has a final say.
The members of the family have full faith and confidence in Karta. Only Karta is entitled to deal with outsiders. But other members can deal with outsiders only with the permission of Karta.
3. Membership by Birth:
The membership of the family can be acquired only by birth. As soon as a male child is born in family, he becomes a member. Membership requires no consent or agreement.
4. Liability:
Except the Karta, the liability of all other members is limited to their shares in the business. The Karta is not only liable to the extent of his share in the business but his separate property is equally attachable and amount of debt can be recovered from his separate property.
5. Permanent Existence:
The death, lunacy or insolvency of any member of the family does not affect the existence of the business of Joint Hindu Family. The family goes on doing its business.
6. Implied Authority of Karta:
In a joint family firm, only Karta has the implied authority to contract debts and pledge the credit and property of the firm for the ordinary purpose of the businesses of the firm.
7. Minor also a Partner:
In a partnership, minor cannot become co-partner though he may be admitted to the benefit of partnership. In a Joint Hindu Family firm minor is a partner.
8. Dissolution:
The Joint Hindu Family Business can be dissolved only at the will of all the members of the family. Any single member has no right to get the business dissolved.
