this is the presentation for educational purposes on some of the business topics like joint hindu family business. it contains all the necessary information about joint hindu family business.
3. A Hindu Undivided Family consists of a common ancestor, which is
a must to bring a J.H.F. into existence, all his male descendants upto
any generation along with their wives and unmarried daughters. The
death of a common ancestor does not bring the Joint Hindu Family to
an end. It continues till perpetuity, as upper links are removed by death
and lower ones are added by birth.
All the affairs of the Joint Hindu Family are controlled and managed
by one person known as ‘Karta’ or ‘Manager’. He is having a
very unique position which no other members of the family but
ultimately he has a final say.
Karta’s powers are almost unlimited. He acts on behalf of the other
members of the family but is not like a partner, neither he is
accountable to anyone nor he is to prepare accounts. No one can ask
what was the income and what was the expenditure.
5. Mitakshara says of son’s right by birth in the joint family
property. This means, when a son is born in family, he acquires
an interest in the property jointly held by the family. The
interests of all sons are equal. The joint family property
devolves by survivorship, meaning thereby, it will go to one
who lives longer than others.
6. Dayabhaga is prevalent in Bengal and Assam, whereas in the
rest of India, it is Mitakshara. In Dayabhaga Joint Hindu
Family, the concept of birth right is unknown and the property
devolves by inheritence. The shares of the coparceners are
specified and not fluctuating as in the case of Mitakshara Joint
Hindu Family.
7. 1.Governed by Hindu Law
2.Membership by Birth
3.Managed by Karta
4.Limited Liability
5.Continuity
6.Minor also a member
8. The control and management of the joint hindu family firm is
done according to the uncodified or codified Hindu Law. The
uncodified Hindu Law consists of two schools, Mitakshara and
Dayabhaga. In the same way rights and duties of its members
are governed by uncodified Hindu Law.
9. The membership of the family can be acquired only by birth.
Whosoever is born in the family, becomes a member. By
adoption, an outsider can be admitted to its membership,
because adoption is considered to be replantation in the family
by which a person is being adopted. Marriage with the male
member is also confers membership. These are the only two
expectations by which membership is acquired otherwise than
birth I.
10. The family affairs are managed by the senior most member of
the family known as ‘Karta’ or ‘Manager’. The powers of
management are unlimited. He can discriminate between the
members but cannot deny maintenance or use of property. But,
the management is more effective due to the natural love and
affection with the members of the family.
11. All the members of the joint hindu family have limited liability
to the extend of the property which is jointly held by the
family. The self-acquired property of any member cannot be
taken in order to satisfy the loans taken by the family.
However, ‘Karta’ is also personally liable for loan taken on
promissory note.
12. As it has already been discussed in introduction, the
death in the family does not bring the joint family
firm to an end. It continues forever. There is no limit
to its membership number also.
13. In partnership firm, minor cannot become a
partner. This is an important feature of this
business organisation that a person from its very
birth become a member.
14. There is implied authority in favour of Karta to
contact debts and pledge the credit and property of
the family for ordinary purpose of family business.
These are blinding on the entire family. Leo other
member is having such an authority.
16. The management of a hindu joint family firm is centralised in
the hands of one man known as ‘Karta’. He being the eldest
and most experienced person gives a very disciplined
management. Karta takes all decisions and gets them
implemented with the help of other members. He may be
managing rightly or wrongly, no other member interferes in his
management.
17. The business requires secrecy. As in Joint Hindu
Family firm only Karta is to manage the entire
show, he can do it with the utmost secrecy which no
other business can maintain, he can keep a thing a
secret even from the members of the firm.
18. In Joint Stock Company, it takes a long time to take a decision.
A quick decision is of great advantage. Sometimes, a very
profitable venture is lost due to lack of quick decision. In Joint
Hindu Family firm, as Karta is the only decision-maker, he can
take a very quick decisions. It is further advantageous that the
decision is final and unchallengeable.
19. There may be a contractual force of the temptation of profits
which is between the members of a business organisation. But,
in Joint Hindu Family firm, it is the natural love and affection
which the members are having for each other. Due to this they
are ignoring the shortcomings of each other and help to run the
business more smoothly and efficiently.
20. The investments are limited only upto the resources
of one family. They may not be sufficient to meet
business requirements for expansion. This is of great
disadvantage these days, when big industries are
being encouraged.
22. The investments are limited only upto the resources
of one family. These may not be sufficient to meet
business requirements for expansion. This is of great
disadvantage these days, when big industries are
being encouraged.
23. Only the eldest male member of the family is to manage the
family business. He is performing all the functions of the
management. He may not be well conversant with the
knowledge of business skill and other problems of the business
management. In spite of this he is managing and continues to
manage the business of Joint Hindu Family firm.
24. The Karta is empowered with vast power of secrecy and
he can keep a thing secret even from its members. But,
there is no restriction on him that he cannot dissolve
anything to any person with whom he is having more
love. This gives birth to suspicion among the members
themselves which can be disastrous for the Joint Hindu
Family.
25. Karta is the man who talks all decisions for the
business. He may consult co-partners, but his
decision is final. This may cause conflict among
family members and may even lead to break up
of family unit.
Domination of Karta.
