JOINT HINDU FAMILY FIRM
MEANING OF JOINT HINDU FAMILY
The joint Hindu family business is a form of business organisation in which the family possesses some inherited property and the ‘KARTA’ the head of the family, manages its affairs. It comes into existence by the operation of the Hindu law and not out of a contract between the members or co-partners. If the persons who have co-parcenary interest in the ancestral property carry on business. It is a case of joint Hindu family firm. Thus, the joint Hindu family business is a business is a business by co-parceners of a Hindu undivided estate.
Three generations next to the holder in unbroken male constitutes a co-parcenary and property inherited by a Hindu from his father, father’s father and grandfather’ father is regarded as ‘ancestral’. A son, grandson and great-grandson become joint owners of the property by virtue of their birth in the family. The property is managed and held by the senior male member or the father as the head of the family, technically known as ‘Karta’. THE HINDU LAW, A FAMILY BUSINESS is taken as part and parcel of the inheritable property , and therefore , the family business becomes the subject matter of co- parcensary interest . The rights and liabilites of co-parcensers are determined by the general rules of the hindu law . It should be noted that the joint family firm is created by the operation of law and does not arise out of the contract between the co-parceners.
#FEATURES OF JOINT HINDU FAMILY BUSINESS
1.Status : The membership of the family business is the result of status arising from birth in the family. There is no question of the member being discriminated in terms of minority and majority on the basis of age.
2.Male members: Only male members of the family can claim parcenary interest in the joint hindu family business firm.
3.Karta: The right to manage the business vests in karta along. He has the implied authority to obtain loans through mortgage etc. for the purpose of the business. Other members have neither any right to manage the affairs of the business. Other members have neither any right to manage the affairs of the business nor any right to loans on the mortgage of family assets for the purpose of business.
4.Liability: The liability of all the members of the joint hindu family, except that of the karta, is limited to the value of their individual interset in the joint property. the liabilty of the karta is unlimited and as such extends to all that he owns as his separate and private property.
5.Fluctuating share: The share of each member is interested in the family property and business keeps on fluctuating. The members’ interest increases by the death of any existing co-parcener and decreases by the birth of a new co-parcener.
6.Continued existence: the existence of the joint hindu family business is not affected by the death or insolvency of a co-parcener or that of the karta.
ONE BIG example of JOINT HINDU FAMILY BUSINESS IS : RELIANCE INDUSTRIES the AMBANIS