Joint Hindu Family Business

Joint Hindu Family is a form of business organization wherein the members of a family can only own and manage the business. It is governed by Hindu Law. Joint Hindu Family cannot be formed or created by any contract or agreement because this organization came into existence by the operation of the “Hindu Law”. It is not formed by any agreement like partnership firm. Whenever, there is Hindu Undivided Family, there is the scope for Joint Hindu Family Business. It is not at all compulsory to register this organization because it is the result of Hindu Law. There are two types of members, i.e, Karta and coparceners. Karta is the elder male member of the family who controls and manages the business. The other family members are called as the coparceners. New members are added into the family by birth or marriage into the family, whereas the number gets reduced by death or marriage out of the family. Earlier, women were not considered as coparceners. However, with the amendments of the Hindu Succession Act, 1956 in the year 2005, women have been included in the definition of coparceners, with a right to inherit in their own names. The head of the family has full responsibility of the management of Joint Hindu Family Business. He is free to take any decision without any interference of any coparceners but he can take advice and help from the family members. The liability of Karta is unlimited because he is the only deciding authority whereas the liability of coparceners is limited up to their share in the capital of the family. Lastly, according to Hindu Succession Act, 1956, all the members of Hindu Undivided Family have equal rights to share the profits as well as losses of the business. In case of Joint Hindu Family firm registration is not at all compulsory; hence it does not enjoy any legal status.