Question

Explain the characteristics of a Joint Hindu family business. 

Answer 1

1. Membership: A person becomes a member of the family business by birth into the family. No formal agreement is required. Membership is restricted to three successive generations, and minors are also eligible to join. There is no limit on the number of members.
2. Management: The business is managed by the karta, who is the eldest member of the family. The karta may associate other members to assist in managing the business.
3. Liability: The karta has unlimited liability. Other members’ liability is limited to their share in the family property.
4. Right to Accounts: Coparceners (members) are generally not entitled to inspect the business accounts; however, a coparcener leaving the business can demand access to the accounts from the karta.
5. Dissolution: The business is not dissolved upon the death of a coparcener. It ends only when all members declare they are not members of the Joint Hindu family.