Why is joint hindu family business established in india. Advantages and disadvantages of living in a joint family a joint family was a phenomena found only in india of the bygone days. It is a voluntary association of people with collectively owned fund, organised on the democratic principle of equality, who join together to supply for their requirements through mutual. Along with numerous powers, many controls on karta have been imposed to prevent any abuse of power.
A hindu joint family means what in any system of law prevailing in india is known as a hindu joint family or coparcenary. The advantages of forming a company rather than carrying on partnership business are as follows. In a joint family system basically all the members of the family live together under one roof and are related to each other. While making a critical assessment of advertisings role the critics focus more on its social role, while defenders present economic argument. There are also several disadvantages in terms of running a family business. Sole trade and the limited company are the most common alternatives in the businesses. Registration of joint stock company is compulsory by law.
Improving entrepreneurship and family business effectiveness through research and sharing of best practices, and familybusiness. Basic information 1 2 name of hindu joint family as registered with lhdnm. In this form of business ownership, 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. Therefore, it cannot undertake big and risky business. To run any business partnership is the most common way. The joint hindu family firm is the next noncorporate, group ownership form of family business operative in india. A partnership usually involves a continuing, longterm business relationship, whereas a joint venture is based on a single business project. Advantages and disadvantages of cooperative society. Business also has limited financial source as it is dependent on its family members. The joint hindu family business is a distinct form of organisation peculiar to india. A joint hindu family is normally joint in worshipkitchenbusiness. After reading this article you will learn about the advantages and disadvantages of joint stock company.
Due to limited financial resources, it is difficult for a business to expand. Like the sole proprietorship has centuries old history. Thanks for the a2a as posted in the picture, the joint hindu family business is a family business involves only the members of the family. There are innumerable advantages of the joint venture. The life of joint hindu family business is uncertain. Advantages and disadvantages of family entrepreneurship.
Apr, 2016 advantages and disadvantages of partnership. It allows only the male members to be coparceners in the business. Such societies have unique features of joint ownership and democratic leadership. What is the advantage and disadvantage of joint family in. A joint hindu family is headed by a karta, who is normally the eldest living male member of the family.
Others members of the family are known as coparceners, who become the member of the business right at the time of their birth. Partnership firm kinds of partners, advantages and disadvantages. One of such rules is individual and separate pan for huf, using which the member can file. In the revived model, the families coming together may or may not belong to the same parent family. A joint family may encompass countless generations. It does not have any separate and distinct legal entity from that of its members.
The joint hindu family business is controlled under the hindu law instead of the. The traditional assumption behind such a deduction is that every hindu family is normally a joint family. Though there are a lot of advantages of living together in a joint family, it has some disadvantages also. The importance of family business as an academic discipline. Features merits introduction limitations examples 3. Joint hindu family business leadership qualities of. Advertising is powerful enough to give society cause for concern.
Usually, the right to family management rests with the oldest member of the joint family, but may, with the consent of other criminals, renounce this right in favor of the next family member. Characteristics of a joint hindu family business 3. Hence, all the shareholders use their voting rights and elect a body for the management of routine affairs of the business. The advantages and disadvantages of a family business. It is one of the oldest forms of business organization in the country.
A joint family system could be created by a family of friends. It does not arise out of the operation of law as in the case of joint hindu family. It is a specific form of business organization found only in india. What are the advantages and disadvantages of joint ventures. Benefits and drawbacks of huf in tax compilation while there are several benefits and drawbacks of hufs in tax compilation, you might be able to save on your income tax by forming a hindu undivided family since such households generally have a joint income instead of individual incomes. We also identified multiple gaps in contemporary family business research. The joint hindu family business is an affectionate business and a distinct form of organization peculiar to india. The basic concept of the joint family system is that more than one family come together under one roof and lead a life of mutual cooperation and interdependence. The joint hindu family jhf business is a form of business organisation found only in india. The operation of law creates a joint hindu family business. Advantages and disadvantages of joint hindu family business. The company is required to file its accounts with registrars of companies and tax authorities annually. Economists see advertising as inflating the price, religious leaders blaming it for materialism, sociologists blaming it for lowering values of society, and politicians think. Everything you need to know about the advantages and disadvantages of cooperative society.
Hindu undivided family huf the joint hindu family business or the hindu undivided family huf is a unique type of business entity. What are the features of a joint hindu family business. There is always a lack of motivation among the members to work hard. A company has to go through various formalities as prescribed by the companies act in order to be registered. Establishing a joint stock organization is not easy. The meaning, advantages and disadvantages of joint family has been discussed in this article. A cooperative form of business organization is different from other forms of organizations. A social study of the benefits of the joint family system. Class 11 cbserbse joint stock company in hindi meaning, features, merits and limitations duration.
Meaning, importance of karma to managers, nishkama karma. Aug 12, 2014 though there are a lot of advantages of living together in a joint family, it has some disadvantages also. Having a joint account requires the presence of trust between or among the account holders. Such an assumption has been encouraged by the study of hindu law and scriptures where the normative hindu family is always joint. Since the business is run by the members are relatives and members of the same family, there is a greater. Owners of the joint stock company are known as shareholders. This really meant that, the parents with all their children and grandchildren stayed together under one single roof. Indian ethos in management as per the revised syllabus 201617 of mumbai university for t.
If the turn over of the business of a huf member exceeds over rs. Joint stock companies are subject to government scrutiny. Advantages and disadvantages of family entrepreneurship and. The eldest male member of the joint family is the karta, who is responsible for managing and controlling the business operations. Living in a joint family, you may have lack of leadership and decision making qualities as head of the family will decide and does all the important decisions. Dec 30, 2016 having a joint account requires the presence of trust between or among the account holders. Dec 29, 2017 class 11 cbserbse joint stock company in hindi meaning, features, merits and limitations duration. Even within india its existence is restricted to only certain parts of the country. Even daughter in lawswidowed daughters who has returned back to their parental side are part of a hindu joint family. Before moving towards the advantages and disadvantages of partnership, it is important to know what partnership. Forms of business organisation business environment 28 3. A business, which continues from one generation to another generation is known as joint hindu family business or firm.
Advantages of joint ventures are speed, access, sharing of resources and the leveraging of underutilized resources, high profits, back end income, low or no risk opportunities and massive leverage disadvantages of joint ventures are the possibility of being ripped off or disappointed by unscrupulous and unprofessional jv partners, and hurting your reputation andor customers and associates. The manager of the hindu joint family or karta is required to declare all sources of income in form tj. Let us take a brief look at their features and some types of societies. Advantages and disadvantages of joint stock company. One of such rules is individual and separate pan for huf, using which the member can file their returns. Sep 11, 2018 the article is all about the main advantages and disadvantages of partnership in business over the sole proprietorship. Joint bank accounts have their advantages and disadvantages. It is not possible for each shareholder to participate in the management affairs of the business. It is governed and dictated by the hindu law, which is one of the several religious laws prevalent in india so who all are members of such an organization. Only the members of the joint hindu family can become a member of business. In a joint account, its easier to access the funds when the spouse passes away. This system could prevail for decades for several reasons. Hindu undivided family huf act advantages, disadvantages.
Joint hindu family business is a different type of organization, which is found only in india. It prevails in all the countries, this is almost a. Jan 20, 2018 joint hindu family business class 11 1. Advantages and disadvantages of living in a joint family. The owner of the business tends to promote their family members despite the fact that they are incompetent for the position. However, the disadvantages also tag along in the process. There are certain rules and regulations to be followed by huf. The following is a list of the pros and cons of having joint accounts. When a joint hindu family hindu undivided family conducts business inherited by it as per hindu law, it is called joint hindu family firm. Smart entrepreneurs and business owners know that joint ventures are the fastest and most effective way to radically increase sales and profits with virtually no money and no risk, as long as its done correctly. In this form of business, all the members of a hindu undivided family own the business jointly. Membership of joint hindu family business is not open to the public. Hundreds of businesses around the globe are running with partnerships. Joint stock company meaning advantages disadvantages.
The disadvantages of living in a joint family are mentioned below. Parties enter joint ventures to gain individual benefits, usually a share of the. Benefits and drawbacks of huf in tax compilation benefits and drawbacks of huf in tax compilation while there are several benefits and drawbacks of hufs in tax compilation, you might be able to save on your income tax by forming a hindu undivided family since such households generally have a joint income instead of individual incomes. A joint hindu family is normally joint in worshipkitchen business. Well, any person born into the family boy or girl up to the next coming three generations is a part of. Rut they deal only with a norm and not the reality. The limitations and deficiencies of sole proprietorship and joint hindu family business led to the emergence of partnership as a form of business organisation. Property belongs to the family as a whole and all family income is pooled together. Basically, there are two kinds of members in a joint hindu family business, i. Family businesses are capable of promoting entrepreneurism, generating wealth and security for families and for providing employment opportunities for those in the community. Partnership is an association of two or more persons to carry on a business and share its profit and loss among them.
The inheritors of the joint hindu family business are called co. Partnership is formed on the basis of an agreement between two or more persons to carry on business. Partnerships and joint ventures can be similar but in fact can have significantly different implications for those involved. Oct 21, 20 the meaning, advantages and disadvantages of joint family has been discussed in this article. However, with urbanization and economic development, india has witnessed a break up of traditional joint family into more nuclearlike families, and the traditional joint family in india accounted for a small number of indian households. Feb 03, 2016 the property of a joint hindu family may consist of ancestral property, joint acquisitions self acquisitions thrown into the common stock however, even in the absence of any property, the joint hindu family may still be in existence as a joint hindu family damodar krishnaji nirgude v. Indian citizens with hindu ethnicity can come together and save a good amount of taxes by creating a huf. Joint hindu family business class 11 linkedin slideshare. As you can see, a wellrun family business is capable of having a positive impact not only on the family involved, but also on the local and global economies. The outstanding advantage is that it allows vast mobilization of capital which otherwise is. A hindu undivided family huf act how to save income tax by forming a. Without sharing the family business to external parties and using the family business profit for the well being of particular family.
The joint hindu family business or the hindu undivided family huf is a unique form of business. Joint hindu family business is a distinct type of organisation which is unique to india. Joint hindu family business has generally limited financial and managerial resource. What are the aims and objectives of a joint hindu family. Let us look at some of the disadvantages of the joint. A hindu undivided family or huf is a legal term related to the hindu marriage act. The affairs of business are managed by the head of the family, who is known as the karta. The head of the family is the head of the business also. The property of a joint hindu family may consist of ancestral property, joint acquisitions self acquisitions thrown into the common stock however, even in the absence of any property, the joint hindu family may still be in existence as a joint hindu family damodar krishnaji nirgude v. A joint family also undivided family, joint household, extended family system is a large undivided family where more than one generation live together in a common house. In addition, a family member may also take the chance to get an advantages even if it doesnt supported by the policies of the companies.