Question

Distinguish between the following.
Joint Hindu family firm and Joint stock company

Answer 1

Basis of Difference	Joint Hindu Family Firm	Joint Stock Company
Governance	Governed by the Hindu laws	Governed by the Companies Act 1956
Number of members	Minimum: 2 Maximum: No limit	In case of a private company: Minimum: 2 Maximum: 50 In case of a public company: Minimum: 7 Maximum: No limit
Minor	Minors can be members	Minors cannot be members
Management and Control	Managed and controlled by the Karta.	Managed and controlled by the managing director.
Liability	Karta has unlimited liability; other members enjoy limited liability.	Shareholders have limited liability to the extent of the unpaid amount on the shares held by them.
Formation	Easy to form, as few legal formalities need to be fulfilled.	Comparatively difficult to form, as several legal formalities need to be fulfilled.