The Hindu Undivided Family (HUF) and partnership are distinct business entities with different characteristics. A HUF arises by status or operation of law based on Hindu principles of joint family, while a partnership arises from an agreement between partners. Members of a HUF are called coparceners and have rights based on birth, whereas partners must consent to new members joining. On death, a partnership may dissolve but an HUF continues until partitioned between family members. Management of an HUF business generally vests in the Karta, while partners equally manage a partnership.

1. Difference Between Partnership and
Hindu Undivided Family

2. • The Joint Hindu Family Business or the Hindu
Undivided Family (HUF) is a unique form of business
organization found only in India. Nowhere else in the
world is this a legal form of business entity. Let us
learn about this form of organization and its unique
features. And understand how it is distinguished from
Partnership firm.

3. Distinction Partnership Hindu Undivided Family
1. Regulating Law
A partnership is governed by the provisions of
the partnership Act,1932.
A joint Hindu family business is governed by the principles
of Hindu law.
2. Creation It arises from an agreement. It arises by status or operation of law.
3. Name of the
Persons Involved
The persons who form partnerships are called
‘Partners’.
The persons who are the members of the HUF are called
‘Coparceners’.
4. Admission of
new Members
No new partners are admitted without the
consent of all the partners.
A new member is admitted just by birth.
5. Death
Death of a partner ordinarily leads to the
dissolution of the partnership.
Death of a member in the HUF does not give rise to the
dissolution of the family business.
6. Management
All the partners are equally entitled to take part
in the partnership business.
The right of management of the Joint family business
generally vests in Karta, the governing male members of
the family.

4. Distinction Partnership Hindu Undivided Family
7. Number of
Members
In a partnership, the maximum limit of partners
is 10 for banking business and 20 for any other
business.
There is no maximum limit of members in the case of joint
HUF business.
8. Right of Share
profits
In a partnership, each partner is entitled to claim
his separate share of profits.
A member of a joint HUF business has no such right. His
only remedy lies in a suit for partition.
9. Authority of
Bind the Firm
Every partner can, by his act, bind the firm.
The ‘Karta’ or the manager has the authority to contract
for the family business.
10. Liability The liability of a partner is unlimited.
The liability of the Karta is unlimited, and the other
coparceners are liable only to the extent of their share in
the profits of the family business unless they take part in
the act performed or transactions entered into by the
Karta.
11. Minor’s
Capacity
A minor cannot a partner, though he can acquire
benefits of partnership, only with the consents
of all the partners.
A minor becomes a member of the ancestral business by
the incidence of birth. He does not have to wait for
attaining the majority.
12. Continuity
A firm subject to a contract between the
partners gets dissolved by the death or
insolvency of a partner.
A HUF has continuity until it is divided. The status of HUF is
not thereby affected by the death of a member.