What is Joint Hindu Family Business | All about Joint Hindu Family Business

Joint Hindu Family Business

Meaning Of Joint Hindu Family

According to the Hindu Law,joint hindu family is a group of persons whose ancestors are same.Under it the unmarried daughters and wives are also included.The organisation of the joint Family is based on the following facts:
(1) Coparcenary: Coparcenary means a common ownership in the ancestral property.Coparcenary is created by law and not by any contract.According to it,an individual gets a right in the ancestral property immediately after birth.That person is known as Coparcener.

(2) Common Property:According to law,a Hindu joint family gets recognised as undivided Hindu family only when the family posses a property that is used for the welfare of all the members of the family.

Meaning Of Joint Hindu Family Business

When a business enterprise is run by the people belonging to the same family and they run the business as family business as a family business,it is called joint hindu family business.In such a form of business the authority of control is in the hands of the karta or manager of family.The eldest member of family is called karta.

Merits Of Joint Hindu Family Business

(1) Easy To Start:It is easy to start the joint hindu family business because there is no need to complete any legal formality for its establishment.

(2) Secrecy:Under the joint hindu family business all the facts remain confined to the karta.Therefore,the competing business cannot get any important imformation.

(3) Direct Contact With Customers:The karta of the joint hindu family business comes in direct contact with his customers.Therefore,he has a complete imformation about the liking,attitude & fashion of his customers.This helps him in planning for his business.

(4) Prompt Decision:The karta of the joint hindu family business is free to take business decisions.He does not need to consult anybody for his purpose.Therefore,he can take prompt decisions which are essential for the success of the business.

(5) Direct Relationship between Efforts and Consideration:The karta of the joint hindu family business has the exclusive right on the profit of the business.This gives encouragement to put in more hard work.

(6) Advantage Of Inheritable Quality:The joint hindu family business is handed over by one generation to the other and the members of the family continue to mantain the old ideal traditions of the family.This gives the benifits of the ancestral reputation of the business.

Limitations Of Joint Hindu Family Business

(1) Limited Resources:The resources of the joint hindu family business are limited.This reduces the power of competition in business.These factors also become a hindrance in the development of the business.

(2) Limited Managerial Skill:It cannot be expected of any person,however intelligent he may be,to know all the intricacies of business.

(3) Unlimited Liability:The responsibility of the karta in the joint hindu family business is unlimited.Consequently,the decisions taken are not favourable to the business.

(4) Disadvantages from Centralisation of Power:The joint hindu family business is based on the mutual cooperation.The karta has the absolute power of taking business decisions.Sometimes,he misuses this power which leads to the loss of love and goodwill among other members of the family.

Thanks For Reading!!!
-Sujal Juneja
(Juneja Technology)

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