STUDY ON JOINT HINDU FAMILY

INTRODUCTION
Joint Hindu Family Business is a form of organization which exists only in India. It is one of the oldest form of organizations and in existence only in some parts of the country. This form of organization has ownership in the hands of members of a Hindu undivided family. The business is carried out buy the male members of a undivided family. As the name suggests, it is type of organization in which all the members of Hindu Undivided Family manage and control the business with the direction of head of the family. It is not a Partnership. It is just like a Partnership where only the members of the family can take part. The business is carried on from generation to generation. This kind of business is not governed by the Industrial or company Act but it is governed by the HINDU SESSION ACT, which exist under Hindu law. Before 1956, female members of the family were not having equal rights with male members but the Hindu Succession Act, 1956, has its provisions for female members also.

All members of a Hindu undivided family do business jointly under the control of the head of the family who is known as the 'Karta'. The members of the family are known as 'Co-parceners'. Thus, the Joint Hindu Family firm is a business owned by co-parceners of a Hindu undivided estate. There are two conditions for existence of Joint hindu family business. These are: 1.) Minimum two male members must be there in the family. 2.) Existence of some ancestral property. Under hindu law there are two systems of inheritance. These are: 1.) Dayabagiha. This system prevails all over India in west Bengal. Under this system the male as well as female members can become copartners as well as co_parcners. 2.) Mitakshara. This system prevails all over India except west Bengal. Under this system only male members can become coparcners under joint hindu family business.

FEATURES
(1) Formation: 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. (2) Registration: It is not at all compulsory to register this organization because it is the result of Hindu Law. (3) Membership: 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. There is no limit on membership because the membership is by birth. (4) Management: 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 co-parceners but he can take advice and help from the family members. (5) Liability: The liability of Karta is unlimited because he is the only deciding authority whereas the liability of co-parceners is limited up to their share in the capital of the family. The kartas liability is unlimited so his personal assets can also be used to pay back the debts of the business. (6) Sharing of Profits and Losses: 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. (7) Legal Status: Any organization gets separate legal status only after its registration with appropriate authorities. In case of Joint Hindu Family firm registration is not at all compulsory; hence it does not enjoy any legal status. Though, Joint Hindu Family Business is enlarged form of sole trading concern and it has got due recognition by Income Tax Act, 1961, and Joint Hindu Succession Act, 1956, then also it does not enjoy separate legal status because of Joint Hindu Family firm and its members are one and the same that is inspirable. (8) Partition: As Joint Hindu Family Business is totally controlled by Karta, and co-parceners do not have the right to interfere in the decisions of Karta. But, as per Hindu Law any member who is unsatisfied with the decision of kata can demand partition.

(9) Continuity and Stability: This organization enjoys a long and stable life as it is not affected due to death, insolvency, insanity of any of its member. In other words, if Karta dies or becomes incapable of managing the business then the succeeding co-parceners will act as Karta. (10) Flexibility: There is a great deal of flexibility in business operation. The Karta can expand or change the line of business or he can even close down the business. The co-parceners normally agree with the decisions taken by Karta in the conduct of business. (11) Business Secrecy: There is a great deal of business secrecy in this organization. The business secrets are known to co-parceners in general and Karta in particular. It is not obligatory for them to publish their accounts which results in great deal of privacy and secrecy. (12) Number of members: In joint hindu family business minimum must be two members and maximum there is no limlit. However the membership is restricted to three successive generations. (13) Minor members: In Joint hindu family business a child becomes member by birth so there is no restriction for a minor to become a member of the business.