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Joint Hindu Family – An Affectionate Business


The Joint Hindu Family Business is an affectionate business and distinct form of organization peculiar to India. Joint Hindu Family Firm is created by the operation of law. It does not have any separate and distinct legal entity from that of its members.

The business of Joint Hindu Family is controlled under the Hindu Law instead of Partnership Act. The membership in this form of business organization can be acquired only by birth or by marriage to a male person who is already a member of Joint Hindu Family.

“When two or more families agree to live and work together, throw their resources and labor with joint stock and share profits and the losses together, then this family is known as composite family.”

There are two schools of Hindu Law-one is Dayabhaga which is prevalent in Bengal and Assam and the other is Mitakshara prevalent in the rest of the country. According to Mitakshara law, there is a son’s right by birth in the property of the joint family. It means, when a son is born in the family, he acquires an interest in the property jointly held by the family.

The business of the Joint Hindu Family is controlled and managed by one person who is called ‘Karta’ or ‘Manager’. The Karta or manager works in consultation with other members of the family but ultimately he has a final say. The liability of Karta is unlimited while the liability of other members is limited to their shares in the business.

When a business enterprise is run by the family members and they run a business as a family business then such a form of business organization is called Joint Hindu Family Business. It is also called as Hindu Undivided Family. Joint Hindu family conducts business inherited from it as per Hindu law.


The project aims to learn the benefits and functions of the Joint Hindu Family Business

Objectives of the study are

  1. To learn about what is joint Hindu family
  2. To learn about the problems in joint Hindu family
  3. To learn about the benefits of joint Hindu family
  4. To learn about the features of the joint Hindu family


In this project, we are going to learn about Joint Hindu Family Business

Primary data is data gathered for the first time by the researcher. It is the raw form of data and thoroughly studied and hence a helpful tool for secondary data. Here the method used for the collection of primary data is by using the reference to the website.

The referred websites in this project are used as a source of data for this project. Most of the content is collected from these websites. The authenticity of this information cannot be taken seriously and thus keeping that in mind most of that data might be true or fake.


Advantages of a partnership firm

  • Supportive in problems
  • Festival enjoyments
  • Mutual adjustment
  • Helps to the better study of the children
  • Understanding during marriages
  • Minimum subsistence of the living
  • Disciplines in a family
  • Spirit of oneness

Disadvantages of a partnership firm

  • Misbehavior in the partners
  • Exploitation of member
  • Money value among members
  • The burden in the joint family
  • Inferiority complex


The Joint Hindu Family Business is a family business involves only the members of the family.
Meaning: Joint Hindu Family Business is a different type of organization, which is found only in India. As the name suggests, it is the type of organization in which all the members of Hindu Undivided Family manage and control the business with the direction of the head of the family. It is not a Partnership. It is just like a Partnership where only the members of the family can take part. It is not even sole trading concern, but it is enlargement of sole trading concern in which continuity is guaranteed. The business is carried on from generation to generation. It comes into existence by the operation of Hindu law. It is the result of Hindu Undivided Family system followed in India. Wherever there is a Hindu Undivided Family, there is the scope of Joint Hindu Family Business.

Joint Hindu Family Business, though is an enlarged form of sole trading concern it enjoys stability. It is given due recognition by the Income Tax Act, 1961, and by the Joint Hindu Succession Act, 1956, but it lacks legal status. Status of Joint Hindu Family firm and its members is one and the same.

Membership: The membership of Joint Hindu Family Business is restricted only to members of the family. Members of the family are called ‘co-parceners’. Before 1956, female members of the family were not having equal rights with male members but the Hindu Succession Act, 1956, has its provisions for female members also. The business is controlled by the head of the family called as ‘Karta’. Karta and co-parceners are usually male members.

Management: The management of Joint Hindu Family Business is in the hands of the head of the family who is known as “Manager or Karta”. The Karta has to carry on the business with care, he has to protect the interest of the members, he cannot make secret profits. Karta has full authority and control over the financial aspects of the business. He is called “Custodian of Property”. He is fully responsible for business risk, his liability is unlimited. The liability of the co-parceners is limited. The co-parceners have to help Karta in doing the business. Any member is free to get separate from Joint Hindu Family Business. Generally, separation from the Joint Hindu Family is due to the disagreement with the Karta’s policies and programs.

Types of Joint Hindu Family Business: There are two types of Joint Hindu Family Businesses. They are as follows:-
(1) Mitakshara: Only male members born in the family are eligible to get an equal share in the property of the family. This system exists in India except for West Bengal and Assam.

(2) Dayabhagha: Under this, both male and female members get the share in the property of the family. This form exists in West Bengal and Assam. From June 22, 1994, the female members also have the co-parcenercy right in the state of Maharashtra.


Features of Joint Hindu Family Business

  • Formation: Joint Hindu Family cannot be formed or created by any contract or agreement because this organization came into existence by the operation of the “Hindu Law”. It is not formed by any agreement like a partnership firm. Whenever there is Hindu Undivided Family, there is the scope for Joint Hindu Family Business.
  • Registration: It is not at all compulsory to register this organization because it is the result of Hindu Law.
  • Membership: There are two types of members i.e Karta and Co-parceners. Karta is the elder male member of the family who controls and manages the business. The other family members are called the co-parceners. There is no limit on membership because the membership is by birth.
  • Management: The head of the family has full responsibility for the management of Joint Hindu Family Business. He is free to take any decision without any interference of any co-parceners but he can take advice and help from the family members.(5) Liability: The liability of Karta is unlimited because he is the only deciding authority whereas the liability of co-parceners is limited up to their share in the capital of the family.
  • Sharing of Profits and Losses: According to the Hindu Succession Act, 1956, all the members of Hindu Undivided Family have equal rights to share the profits as well as losses of the business.
  • Legal Status: Any organization gets separate legal status only after its registration with appropriate authorities. In case of Joint Hindu Family firm registration is not at all compulsory; hence it does not enjoy any legal status.Though Joint Hindu Family Business is enlarged form of sole trading concern and it has got due recognition by Income Tax Act, 1961, and Joint Hindu Succession Act, 1956, then also it does not enjoy separate legal status because of Joint Hindu Family firm and its members are one and the same that is inseparable.
  • Partition: As Joint, Hindu Family Business is totally controlled by Karta, and co-parceners do not have the right to interfere in the decisions of Karta. But, as per Hindu Law any member who is unsatisfied with the decision of Karta can demand partition.
  • Continuity and Stability: This organization enjoys a long and stable life as it is not affected due to death, insolvency, the insanity of any of its member. In other words, if Karta dies or becomes incapable of managing the business then the succeeding co-parceners will act as Karta.
  • Conduct of Business: A Joint Hindu Family business is generally run by a senior member of the family called as Karta or the Manager, and he had the full authority to conduct the business activities and business operations.
  • Rights of Karta: The Karta can give receipts, make contracts and draw bills, but he cannot give up debts already due to the Joint Hindu Family Business. He had the authority to sell or mortgages the property of Joint Hindu Family while conducting the business of the firm.


  1. http://www.indiastudychannel.com/resources/124903-Features-Joint-Hindu-Family-Business.aspx
  2. https://www.iaspaper.net/joint-family/
  3. http://www.businessmanagementideas.com/organisation/types/hindu-undivided-family/joint-hindu-family-business-meaning-characteristics-and-advantages/8904
  4. http://family.jrank.org/pages/513/Family-Business-Conclusion.html
  5. https://www.quora.com/For-people-living-in-a-joint-family-how-do-you-manage-your-finances-when-all-members-are-earning

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