HINDU UNDIVIDED FAMILY. (JOINT HINDU FAMILY)

 Meaning : The business carried out by the male members of a Hindu undivided family is known as Joint Hindu Family Business.

This kind of business is not governed by Industrial or Company Act but it is governed by the Hindu Succession Act, which exists under Hindu law.

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.

The ancestral property is inherited by the male members of Hindu undivided family. The members who share the ancestral property and who are entitled to get a share in the profit of Joint Hindu Family Business are known as Coparceners.

Under Hindu law there are two systems of inheritance. These are:

1. Dayabhaga. This system prevails only in West Bengal. Under this system the male as well as female members of Joint Hindu Family can become copartners as well as co-parceners.

2. Mitakashara. This system prevails all over India except West Bengal. Under this system only male members can become Coparceners in the Joint Hindu Family Business.

Features of Hindu Undivided Family 

1. Members by Birth. A person automatically becomes a member in Joint Hindu Family by taking birth in that family. There is no need for any agreement.

2. Management. The Joint Hindu Family Business is managed and controlled by the senior most male member of the family who is called karta. He only takes all the decisions of business. Only the karta has legal rights to enter into contract with outsiders. Other members has no right to take the decisions in the management of Hindu Undivided Family Business.

3. Number of Members. In Joint Hindu Family Business minimum must be two members and maximum there is no limit. However the membership is restricted to three successive generations.

4. Liability. The liability of Karta is unlimited whereas liability of all other members of Joint Hindu Family Business is limited up to their share in the business.

5. Minor members. In Joint Hindu Family Business a child becomes a member by birth only so there is no restriction for a minor to become a member of the business.

6. Registration. It is not compulsory for Joint Hindu Family Business to get registration certificate as it is governed by the Hindu Law Act.