Features of Joint Hindu Family Business


Concept of Joint Hindu Family Business

Joint Hindu Family Business is distinct & most popular type of business practised in India. This business is indigenous to India & not found elsewhere in the world. These businesses are totally governed by Hindu laws. It is not controlled by the Partnership Act. unlike other businesses

The business is managed by members of the Joint Hindu Family. Head of the business is the eldest member of the family. He controls & looks after all the finances of business. The head of business is termed as “Karta”. Karta’s liability in business is unlimited whereas liability of other members of the family is as per their share.

Membership of business is attained either by birth or marriage to the male member in a joint Hindu family. There are 2 schools of joint Hindu family business: Mitakshara & Dayabhagha. In Mitakshara only male members can become a member of the business. But in Dayabhagha both male & female persons of a family can become a member of the business. 

Joint Hindu Family Business Examples

Features of Joint Hindu Family Business


Minimum 2 family members are required for starting a joint Hindu family business. These businesses do not require any contract or agreement. It is fully controlled & governed through Hindu law. No agreement like a partnership firm is required here. However, there is a requirement of some assets & business or ancestral property for running a business.


Membership to these businesses is acquired in 2 ways. One is by Birth in the joint Hindu family. The second one is through marriage to a male member of the family. There is no limit on the number of members in the business. Head of business is known as Karta. He is the eldest member of the family. Rest all member of business are known as co-parceners.


The entire responsibility of the business affairs lies with Karta. He has full freedom to take any decision for business without any other member interference. However, he can discuss & can take help from other members. Rest all members also manage the business but prime control is with Karta. All other members work under his instructions.


Joint Hindu family businesses are not compulsorily required to go for registration of their business. There is no much documentation required for starting this business. These businesses are fully operated through Hindu law. No formalities like a partnership firm are required here.


Joint Hindu family businesses enjoy stable & perpetual life. These businesses are not affected by insolvency, insanity or death of any of its members. Even if the head of business, Karta dies the next eldest member of the family becomes Karta. Business is dissolved if all the members mutually agree for it.


Liability of the head of business, Karta is unlimited. As he is the one who has full control over business affairs. Whereas, the co-parceners of business have limited liability. Their liability is limited to their share in the business.

Profit & loss sharing

Hindu Succession Act, 1956 is followed for sharing of profits & losses. According to this act, all members of the business are equally eligible for a share in profit & loss of the business. Everyone should get their share as per their holding in the business.

Credit Standing

Joint Hindu family businesses enjoy very good credit rating in the market. These businesses can easily acquire finance facilities from bank & other financial institutions. Heads of these businesses run the business most effectively due to their unlimited liability. This good credit rating helps in winning a competitive advantage in the market.

Features of Joint Hindu Family Business PDF

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