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Question
Answer in brief.
State any four merits of the Joint Hindu Family Firm.
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Solution
Merits of Joint Hindu Family are as follows:
- Easy Formation: Joint Hindu Family Firm can be easily formed. The formation is simple. Registration is also not compulsory. There is no limit on minimum or maximum members in the business. Family members become coparceners by birth in the family.
- Quick Decision: Only the Karta is involved in the decision making process. This helps to make quick decisions in business. If decisions are taken quickly there can be prompt actions.
- Business Secrecy: Complete business secrecy can be maintained. All decisions are taken by Karta only. Coparceners cannot even inspect books of accounts. There is no compulsion to publish books of accounts.
- Co-parceners Liability: The liability of co-parceners is limited. It is to the extent of their share in Joint Family Business. Private property of co-parceners cannot be attached to business property.
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Mr. Raghunath is running a business from the last 30 years. This business is ancestoral business of Mr. Raghunath. Kiran and Naman, two sons of Mr. Raghunath are helping him along with their wives.
- Find out the type of business.
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