Features of joint Hindu family business

FEATURES OF JOINT HINDU FAMILY BUSINESS

1)joint ownership

The business is jointly owned by all the members of joint Hindu family. Three successive generations inherit the business or property due to their birth in the Hindu family. Every child born in a joint Hindu family becomes co-partner by reason of his/her birth.

2)minimum government regulation joint Hindu family business is subject to least government formalities. The business can be formed or close down without much legal formality.

3)limited liability of co-parceners

The co-parcener's liability is limited to extent of their share in the family business. This means personal properties of the co-parceners will never be utilized. 

4)unlimited liability of karta

The liability of 'karta' is unlimited. This means, if the property of joint Hindu family is not sufficient to pay off the third party liabilities, his personal property can be utilized.

5)sole control by 'karta'

Marta is only manager, controller and coordinator of his business. He can enter into contracts with third party through bills of exchange, can show receipts, can sell or mortgage the property of joint Hindu family business in the interest of the co-parceners.

6)membership

The membership of joint Hindu family firm is unlimited. This is because the membership of the business depends upon birth and deaths  in the family.

7)limited capital

This types of business cannot raise large amount of finance. This is because, the sources of collecting capital are limited.  The capital can raised from saving of the family members, borrowing from friends and relatives and also taking loans from bank but limited amount.

8)Business dominated by male members

This types of business is dominated by male members of the family. Female members are not allowed to participate in the activities of joint Hindu family business.

9)Business secrecy

The business secrecy can be maintained to the maximum extent  because they need not publish their accounts and record s. So, competitor cannot easily obtain the secrets  of joint Hindu family business.

10)local area coverage

Due to limited capital and limited nature of business joint Hindu family family firm is restricted to a local area.