Please comment on your comments as you wish. If you have any questions, do not hesitate to contact us by commenting. Karta is the only person who exercises control and direction over the company. He must not consult anyone to make decisions. This ensures quick or quick decisions. As the sole master, he makes quick decisions and seizes the opportunity. This type of business is formed by at least two family members. A company does not need an agreement, because membership is automatically formed by the birth of a new family member. The Karta is not only vulnerable to the extent of its share of the company. Nevertheless, his separate assets are also seizable and the amount of the debt is often recovered from his separate assets. The activities of the common Hindu family are controlled by Hindu law instead of the Partnerships Act. Membership in this form of commercial organization can only be acquired by birth or marriage to a male person who is already a member of the common Hindu family.
All the management functions essential to the proper functioning of a company are provided by the Karta of the family. The Karta may not be able to perform all leadership functions due to limited time, energy and skills. Due to the limited scope of business and limited financial resources, it may not be possible to engage the services of experts in various fields such as purchasing, production and marketing. This factor sets an upper limit for the expansion and expansion of the business. The administration of a common Hindu private company is centralized in the hands of the family`s Karta. No other member may interfere in its management. Historically, India has had a surprisingly widespread tradition of the common Hindu family or the undivided family for generations. The system is an extended family arrangement that prevails throughout the Indian subcontinent, especially in India, and consists of several generations living in the same house and all connected by the common relationship.  A common family consists of a husband and wife, their sons, unmarried daughters, and their sons` wives and children.
The same pattern (sons, their wives and children, and unmarried daughters) has been repeated for as many generations as they are now living. Any number of these persons can be reduced without affecting the legal existence of the family. During this type of business, membership is often acquired only by birth or marriage to a man who is already a member of the common Hindu family. In the common Hindu family business, it is the natural love and affection that the members have for each other. This helps to run the business more efficiently and smoothly. 1) Two male members must be present in the HUF shop. Therefore, a person cannot start this type of business. All the affairs of a common Hindu family are controlled and administered by a person known as a “karta” or “manager”. The Karta is the oldest male member of the family. He works in consultation with other family members, but in the end he has the last word.
The death of a member does not affect the existence of the joint Hindu family business. This activity is subject to the Hindu Succession Act 1956, which is governed by Hindu law. An undivided Hindu family or HUF is a legal term related to the Hindu Marriage Act. Women members also have the right to share ownership in the HUF. The term is mentioned in the provisions of the Income Tax Act, but the term is not defined in the act. There are various aspects of Hindu law relevant to the valuation of HUF`s income under the Hindu Inheritance Act 1956 and the Income Tax and Assets Act 1961 in HUF status, as well as the impact of the provisions of the Hindu Inheritance Act 1956 as amended by the Hindu Estates (Amendment) Act 2005, which are relevant to the valuation of income and assets in HUF status under the Income Tax Act 1961. “When two or more families agree to live and work together, throw away their resources and work with common shares, and share the profits and losses together, then that family is known as the composite family.” Common Hindu family businesses consist of common grandparents (ancestors). The management of Joint Hindu Family Business is centralized in the hands of Karta family. In this business, Karta makes all decisions and implements them with the help of other members. No other member interferes in its management.
It is used in consultation with other family members, but in the end it has the last word. In addition, all family members have full confidence in Karta. The joint hindu family business is controlled and managed by a person called “Karta” or “Manager”. The Karta or manager works in consultation with other family members, but in the end, he has the last word. Karta`s liability is unlimited, while the liability of other members is limited to their actions. The death, madness or bankruptcy of a family member has no impact on the existence of the joint Hindu family business. The family continues its activity. In a traditional common Hindu family, there is a relationship of submission between the wives of the brothers: the patriarch`s wife is called “Badi Bhabhi” (in Hindi), which means “wife of the elder brother”. She is traditionally considered the mistress of the house and is responsible for the management of household affairs and the supervision of servants (if any). The wives of the following younger brothers usually ask for their opinion and permission for all matters/decisions related to the household and raising of the children. Belonging to the family can only be acquired through birth.
Once a male child is born into the family, he or she becomes a member. Membership does not require any consent or agreement. There are no restrictions for minors to become a member of HUF`s company. Every child in the Hindu family becomes a member of the HUF company by birth. Karta`s liability is unlimited, while the liability of other members is limited to their actions within the company. Karta is the oldest member of the common Hindu family business. Karta is responsible for all decisions made and all profits and losses that have occurred in the company. The Joint Hindu Family Company is controlled and managed by a company called “Karta” or “Manager”. The Karta or manager works in consultation with other family members, but in the end he has the last word. Above all, it does not have a legal entity separate and independent of that of its members. The affairs of the common Hindu family are controlled in accordance with Hindu law rather than the Partnerships Act. In the case of Surjit Lal Chhabra 101 ITR 776 SC, mixed family and undivided family are synonymous: “A common Hindu family consists of people who are linearly descended from a common ancestor and include their wives and unmarried daughters.
The daughter ceases to be a member of her father`s family after marriage and becomes a member of her husband`s family. The family is headed by an elderly person named “Karta”, usually the oldest man who makes decisions on economic and social issues on behalf of the whole family. The patriarch`s wife usually exercises control over the household and minor religious practices, and often exerts significant influence over domestic affairs. Family income is paid into a common pool from which resources are drawn to meet the needs of all members, who are regulated by the heads of household. However, with urbanization and economic development, India experienced a break from the traditional common family into more nuclear families, and the traditional common family in India constituted a small number of Indian households. In a joint family business, only Karta has the implicit power to go into debt and pledge the company`s credit and assets for the ordinary purposes of the company`s business. The Karta has the freedom to choose any store of its choice. He does not have to rely on others. Membership in the company is limited to family members. No foreigner can become a member of the Joint Hindu Family Business. The liability of HUF members is limited to their share of the company.
On the other hand, “Karta” has unlimited liability, so his personal assets can be used to settle the company`s debts. According to the Mitakshara Act, there is the right of a son by birth within the property of the common Hindu family business. When a son is born into the family, he acquires a stake in the property jointly owned by the family. The company, which is run by an undivided Hindu family, is called a common Hindu family. .