Characteristics Of Jhf Form Of Business Organisation
From the above discussion, it must have been clear to you that the Joint Hindu family business has certain special characteristics which are as follows:
(a) Formation: In JHF business there must be at least two members in the family, and family should have some ancestral property. It is not created by an agreement but by operation of law.
(b) Legal Status: The JHF business is a jointly owned business. It is governed by the Hindu Succession Act 1956.
(c) Membership: In JHF business outsiders are not allowed to become the coparcener.
Only the members of undivided family acquire co-parcenership rights by birth.. (d) Profit Sharing: All
coparceners have equal share in the profits of the business.
(e) Management: The business is managed by the senior most member of the family known as Karta. Other members do not have the right to participate in the management. The Karta has the authority to manage the business as per his own will and his ways of managing cannot be questioned. If the coparceners are not satisfied, the only remedy is to get the HUF status of the family dissolved by mutual agreement.
(f) Liability: The liability of coparceners is limited to the extent of their share in the business. But the Karta has an unlimited liability. His personal property can also be utilised to meet the business liability.
(g) Continuity: Death of any coparceners does not affect the continuity of business.
Even on the death of the Karta, it continues to exist as the eldest of the coparceners takes position of Karta. However, JHF business can be dissolved either through mutual agreement or by partition suit in the court.