Question

Distinguish between the following.
Joint Hindu family firm and Sole Trading concern

Answer 1

Basis of Difference	Joint Hindu Family Firm	Sole Trading Concern
Members	No limit on the maximum number of members in a family business.	Has only one member (owner).
Continuity	It continues even after the death of the Karta. The next eldest member of the family becomes the Karta.	It comes to an end after the death, lunacy or insolvency of the owner.
Sharing of profits	Profits and losses are shared by the coparceners.	Profits or losses belong to the owner and are not shared with anyone.
Governance	It is governed by the Hindu laws & the Hindu Succession Act 1956.	There is no regulating act.
Liability	Liability of all members is limited, but Karta has unlimited liability.	Liability of the sole proprietor is unlimited.
Decision making	All decisions are taken by the Karta.	All decisions are taken by the sole proprietor.