Characteristics of Joint Hindu Family Business

Characteristics

The main characteristics of Joint Hindu Family Business are given below:

i. Governed by Hindu Law

The business of the Joint Hindu Family is controlled and managed under the Hindu law.

ii. Management

All the affairs of a Joint Hindu Family are controlled and managed by one person  who is known as ‘Karta’ or ‘Manager’. The Karta is the senior most male member of the family. The members of the family have full faith and confidence in Karta. Only Karta is entitled to deal with outsiders. But other members can deal with outsiders only with the permission of Karta.

iii. Membership by Birth

The membership of the family can be acquired only by birth. As soon as a child  is born in the family, that child becomes a member. Membership requires no consent or agreement.

iv. Liability

Except the Karta, the liability of all other members is  limited  to  their  shares  in  the business. The amount of debt can be recovered from his personal property also.

v. Permanent Existence

The death, lunacy or insolvency of any member of the family does not affect the existence of the business of Joint Hindu Family. The family goes on doing its business.

vi. Implied Authority of Karta

In a joint family firm, only Karta has the implied authority to enter into a contract for debts and pledge the property of the firm for the ordinary purpose of the businesses of the firm.

vii. Minor also a co-parcener

In a Joint Hindu Family firm even a new born baby can be a co-parcener.

viii. Dissolution

The Joint Hindu Family business can be dissolved only at the will of all the members of the family. Any single member has no right to get the business dissolved.