Question

Distinguish between.

Joint Hindu Family Firm and Joint Stock Company.

Answer 1

	Points	Joint Hindu Family Firm	Joint Stock Company
1.	Meaning	In a Joint Hindu Family Firm, the Joint Hindu Family conducts business according to Hindu Laws.	A Joint Stock Company is an incorporated association created by law. It has an independent legal existence, is owned by shareholders, and managed by a Board of Directors.
2.	Number of members	Membership of the firm depends upon the birth and death in the family. There is no limit on membership.	Private company- Minimum - 2 Maximum - 200 Public company- Minimum - 7 Maximum- No limit
3.	Registration	Registration is not required.	Registration is compulsory under the Companies Act, 2013.
4.	Liability	Karta has unlimited liability, and Co-parceners have limited liability.	Liability of shareholders is limited to the unpaid amount on their shares.
5.	Capital	The Whole of ancestral property is used as capital.	Company can raise a large amount of capital by issuing shares and debentures.
6.	Secrecy	Secrecy can be maintained within the family.	Less secrecy, since accounts and reports must be disclosed publicly.
7.	Management	Karta manages the business and he is assisted by coparceners.	Managed by a Board of Directors elected by shareholders.
8.	Government Control	There is limited government interference.	Board of Directors manages the Joint Stock company. There is strict government control.
9.	Act	Joint Hindu Family Firms are governed by the Hindu Succession Act, 1956.	Joint Stock Companies are governed by the Indian Companies Act, 2013.
10.	Formation	It is comparatively easy to form.	Formation of a Joint Stock Company is difficult, costly, and time-consuming.
11.	Legal existence	A Joint Hindu Family firm does not have a separate legal existence independent of its members.	A Joint Stock Company has a separate legal existence. It is distinct from its members.
12.	Minor member	Minors can become a member of the firm.	A minor cannot become a member in his/her own right, but shares can be held in the name of a guardian on behalf of a minor.