Inter-I Year-Commerce - Joint Hindu Family Business - Features -Advantages -Disadvantages - Mitakshara Law and Dayabhaga Law

1. UNIT -4
JOINT HINDU FAMILY BUSINESS
Dr. K. THULASI KRISHNA, Ph.D.
AP MODEL SCHOOL & JUNIOR COLLEGE, KANEKAL
ANANTHAPUR – Dist., A.P., INDIA
• tkk2007@gmail.com

2. Meaning of The Joint Hindu Family (JHF) Business
• JHF business is a form of business organisation run
by Hindu Undivided Family (HUF) where the family
members of the three successive generations own
the business jointly.
• The head of the family is known as ‘Karta’ and
manages the business.
• The other members are called ‘Co-parceners’.
• All of them have equal ownership right over the
properties of the business.

3. Features of JHF Business
a. Formation: In JHF, there must be at
least two members in the family
having ancestral property.
b. Legal status: The JHF business is a
jointly owned business. It is
governed by the Hindu Succession
Act, 1956.
c. Membership: Outsiders are not
allowed to become the coparceners.
Only the members of the undivided
family acquire rights by birth.
d. Sharing of profits: All co-parceners
have equal share in the profits of the
business.

4. e. Management: The business is managed by ‘Karta’ and
other members do not have the right to participate in the
management. His ways of managing cannot be questioned.
If the members are not satisfied, they may ask for
dissolution of business by mutual agreement.
f. Liability: The liability of coparceners is limited to the
extent of their share in the business. But the Karta has an
unlimited liability.
g. Continuity: Death of any coparcener or Karta does not
affect the continuity of business. It continues to exist as the
eldest of the coparceners takes the position of Karta.

5. Advantages of JHF
1. Continuity: It is not dissolved by the
death of a coparcener.
2. Centralised and efficient
management: The management of
JHF firm is vested in the hands of Karta
only. This results in the unity of
command and disciplined
management.
3. No limit to membership: By birth,
every coparcener will automatically
become member in HUF. Hence, there
is no limit to membership.
4. Better credit: Its credit worthiness is
better than that of the sole trader.
5. Wise decisions: As Karta manages the
business, he can take wise decisions in
view of his experience in life.

6. Disadvantages
1. No direct correlation between efforts and rewards: Karta
alone looks after the business of JHF. But the benefits are
shared among all coparceners. The coparceners may become
lazy.
2. Limited managerial ability: For expansion and growth of
the business, the management and control of business
becomes difficult, as the Karta alone must manage.
3. Limited capital and financial resources: The financial
resources of JHF are limited as compared with partnership
and company form of business.

7. Mitakshara Law
• This form of HUF prevails in the
entire India except in Assam and West
Bengal.
• Family members of male line and
their wives, unmarried daughters are
its members.
• They get right on existing property
by birth in the family and continue to
such right till their death.
• In this form of organisation, a
widow does not have a claim in the
property, but she can ask for her
maintenance.

8. Dayabhaga Law
• This form of HUF prevails only in Assam and
West Bengal states.
• Under this, the right of property comes to a
coparcener by succession and not by birth.
• Karta has all the rights on the property and
the right would be passed on to the next
generation on his death.

9. Thank you for your attention