Joint Hindu Family Business

Better Production For a
Better Tomorrow
Introduction
Features
Merits
Limitations
Examples
INTRODUCTION
It is a specific form of business Organization found only in India . It
is one of the Oldest forms of Business organization in the country. It
refers a form of organization wherein the business is owned and
carried out by the members of the Hindu Undivided Family. It is
governed by the Hindu Law and it is regulated at Hindu Succession
Act 1956.
Conditions
A minimum of 2 members must be in the family
Existence of ancestral property

Dayabhaga system is basically prevalent
Dayabhaga in West Bengal. When both male and
female are allowed to be a part of
In Joint Hindu business
Family Business
itself, there are
2 systems of The other part is Mitakashara,
inheritance Mitakashara
where only the male members of
the family are allowed to run the
business.
In a family, the one who is the eldest of
all. one person who is going to control
Karta the whole business. Takes all the
important decisions related to the
In Joint Hindu business.
Family Business
itself, there are 2
major groups Rest all the members of the
involved Co-parceners family. They all have to abide by
the decisions taken by the Karta.
FEATURES
For a joint Hindu family business there should
Formation at least be two members in the family. It is not
at all compulsory to register this organization
because it is the result of Hindu Law. It is not
formed by any agreement like partnership firm.
Membership is by birth..
Liability
Control
The control of the family business
lies with the karta. He takes all the The liability of Karta is unlimited
decisions and is authorized to manage because he is the only deciding
the business. His decisions are authority whereas the liability of co-
binding on the other members. parceners is limited up to their share
in the capital of the family.
This organization enjoys a long and stable

life as it is not affected due to death, Minor members
insolvency, insanity of any of its member. In
other words, if Karta dies or becomes
incapable of managing the business then the The inclusion of an individual into the
succeeding co-parceners will act as Karta. business occurs due to birth in a Hindu
Hence operations are not terminated and Undivided Family. Hence minors can also
continuity of business is not threatened. Continuity be members of the business.
MERITS
Continued business Limited liability of Increased loyalty
Effective control
existence members and cooperation
The karta has The liability of

absolute decision all the co
making power. parceners
This leads to except the karta
prompt and is limited.
flexible decision Their risk is well
making. defined and Greater sense of
The death of precise. loyalty towards one
karta will not
another. Pride in the
affect the
growth of business
business as the
links to the
next eldest
achievements of the
member will take
family. Thus helps to
up the position.
secure better
Hence continuity
cooperation from all
is not threatened.
the members.
LIMITATIONS
Unlimited Liability of
Karta
Limited Resources
The Karta is not only loaded
with responsibility of the decision making and
running the business , but also distressed due to
The common problem faced by the joint Hindu
unlimited liability . The business debts can be
family is of limited capital , which is largely
repaid using his property.
dependent on the ancestral property and throws
limits for growth and expansion.
Limited
Dominance of Karta Managerial Skills
The family members might sometimes oppose the Given that the Karta cannot be the specialist in all
decisions of the Karta . This may create conflicts areas of management , the business might suffer due
among the family members and may even lead to to his unwise decisions . His incapability in decision
loss of control and split in the family unit. making may lead to meager profits or sometimes even
losses for the organization .
EXAMPLES
Haldiram’s Food International Limited Haldiram's was founded in 1937 by
today is recognized as a Star Shivkisan Agrawal as a retail sweets
Export House, by the Directorate General and namkeen shop in Bikaner,
of Foreign Trade ,a department working Rajasthan. In 2008, the chairman of
under the Ministry of Commerce the company's Nagpur branch was
,Government of India. Shivkishan Agarwal.
In 1997, Haldiram’s forayed

into milk and milk product Haldiram’s Bhujiawala
industry with products such became operative and
as khowa, Ghee& Butter soon it became a hot
Milk, the manufacture favorite of all Nagpurians.
of Extruded foods such as
vermicelli and 3-D Snacks..
This was followed by a In 2014, Haldiram was ranked

chain of retail outlets & 55th among India's most trusted
showrooms catering to the varied brands. His sons, Rameshwar and
tastes of all segments of society. Moolchand are also the major
shareholders in the business.
Tata Sons Limited is the
bulk shareholder of the
1 Tata group of companies.
About 66% of the equity capital of
Tata Sons is held by philanthropic
2 trusts endowed by members of the
Tata family.
Tata Sons is the owner of the Tata name
and the Tata trademarks, which are
3 registered in India and several other
countries.
Tata Sons is the owner of the Tata name and the

4 Tata trademarks, which are registered in India and
several other countries.

Joint Hindu Family Business

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Joint Hindu Family Business

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Better Production For a

A minimum of 2 members must be in the family

Existence of ancestral property

This organization enjoys a long and stable

The karta has The liability of

In 1997, Haldiram’s forayed

This was followed by a In 2014, Haldiram was ranked

Tata Sons is the owner of the Tata name and the

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