Meaning and features of HUF

1. Joint Hindu Family
Business

2. MEANING
■ Joint Hindu family business refers to a business which is owned by the
members of a Joint Hindu family .
■ It is also known as Hindu Undivided Family business.(HUF)
■ It is the one of the oldest forms of business organization found only in India.
■ The basis of membership in the business is the birth of a male member in a
joint Hindu Family and three successive generations can be in the business.
■ Only male members are entitled to be part of this business
■ The business is managed and controlled by the eldest member of the family is
known as the Karta
■ Other male members are known as Co- parceners

3. FEATURES
1. Formation
Governed by the Hindu Succession Act , 1956
2. Membership
Membership of a the HUF business is effected by the birth of a male
child. It does not require any agreement between family members.
3. Liability
Karta – Unlimited Liability
Co- parceners – Limited to his share in the HUF property.

4. 4. Control
Business is managed and controlled by the eldest member of the
family known as Karta. He takes all the decisions and in the business and
co – parceners will have to abide by the decisions.
5. Continuity
Continuity of HUF business is not affected by the death or
insolvency of co- parceners or even Karta. If Karta dies the next senior
most male member takes the position of Karta , leaving the business stable.

5. 6. Number of members
In a HUF business there is no restriction on the number of
co- parceners. But the membership is limited to 3 successive
generations.
7. Minor members
membership in the Joint Hindu Family business is effected
by the birth of a male child. Thus , minors can also be members
of the business.

6. Questions
1. Which form of business organization is found only in India?
2. The head of the HUF business is called ------------------------?
3. The members of a HUF business is known as -----------------?
4. The liability of the members of a HUF is ----------------------?
5. The Karta in HUF business has ----------------------------------?
6. The membership in HUF business is limited to ----------------?