Hindu undivided family business. Article On Hindu Undivided Family (HUF) topic of Business Environment 2019-01-17
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Hindu Undivided Family: The daughter as the inheritor
The relevance of concept of coparcenary is that only coparceners can ask for partition. The ruling came on a suit filed by Sujata Sharma, the eldest daughter of a Delhi business family who took on Manu Gupta, her younger male cousin who had declared himself the karta. Wherever, there is Hindu Undivided Family, there is the scope of Joint Hindu Family Business. The reluctance of younger members to voice disagreement with the karta, or even older members, can also hurt a business facing modern issues. A single person, male or female, does not constitute a family.
Note Property obtained by daughter from joint family property would be her absolute property. A dedicated person will be allotted to collect the document and information and submit it to Income tax officer. This ensures prompt or quick decisions. It can enter into partnership agreements with others. It comes into existence by the operation of Hindu law. Having strong personal connections helps prevent these complications and makes business transactions smoother.
We are specialist in the Joint Hindu Undivided Family registration. However, out of this, coparceners are only those males who are within 4 degrees in lineal descendent from the common male ancestor. The strong value placed on relationships, hierarchy, and top-down decision making are all distinctly apparent in this Indian business structure, though its role may be changing. This is especially true for family businesses, where personal relationships are business relationships. Short life of business: The life of the family business is shortened if family quarrels take precedence over business interests. The main cause for its decline is the gradual breaking of the joint family system itself.
The business can, however, be ended with the mutual consent of the members. Joint Hindu Family Business, though is an enlarged form of sole trading concern but it enjoys stability. As per this school of law, the son acquires the right in the family property only after the death of his father. 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. This form exists in West Bengal and Assam.
Easy to Start: It is very easy to start the Joint Hindu Family Business. They also argued that customary practice did not allow women to become karta. General partnerships, corporations, limited liability companies, and sole proprietorships all exist, although some go by different names. The patriarch's wife generally exerts control over the household and minor religious practices and often wields considerable influence in domestic matters. There are ambiguities even at the concept level, said Bhatia.
Right of Share profits In a partnership each partner is entitled to claim his separate share of profits. But there are instances where it works, for example, an ancestral property that yields rental income. The Karta is not only liable to the extent of his share in the business but his separate property is equally attachable and amount of debt can be recovered from his separate property. In other words, if Karta dies or becomes incapable of managing the business then the succeeding co-parceners will act as Karta. Management: The organisation, management, and control of the business is vested in the karta of the family.
According to this school, a joint Hindu family consists of all persons including the wives and unmarried daughters lineally descended from a common ancestor. Where the total income exceeds Rs. Misuse of Power: The management of a Joint Hindu Family Business is centralised in the hands of Karta of the family. It is based on the two important facts:- 1 Coparcenary: Coparcenary means a common ownership in the ancestral property. In this community, the moment a son is born he gets all the equal rights, along with his father, in the ancestral property. It also applies to Buddhists, Sikhs, and Jains, and to any person in India who is not Muslim, Christian, Parsi or Jew by religion.
No coparcenary can commence without a common male ancestor though, after his death, it may consist of collaterals such as brothers, uncles, nephews etc. Meaning of Joint Hindu Family Business 2. As per section 2 42A of the Income-tax Act, in the above two cases point 11 and 12 , the period of holding of the asset of the transferor shall also be considered for computing the period of holding of the asset in the hands of the transferee. Dissolution: The Joint Hindu Family Business can be dissolved only at the will of all the members of the family. Creation It arises from an agreement. It is given due recognition by the Income Tax Act, 1961, and by the Joint Hindu Succession Act, 1956, but it lacks legal status.
