Joint hindu family business - Class 11

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1. JOINT HINDU FAMILY BUSINESS Better Production For a Better Tomorrow

2. Features Merits Introduction Limitations Examples

3. INTRODUCTION

4. 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. A minimum of 2 members must be in the family Existence of ancestral property Conditions

5. In Joint Hindu Family Business itself, there are 2 systems of inheritance Dayabhaga Mitakashara

6. In Joint Hindu Family Business itself, there are 2 major groups involved Karta Co-parceners

7. FEATURES

8. For a joint Hindu family business there should 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. . 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. This organization enjoys a long and stable life as it is not affected due to death, insolvency, 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. Hence operations are not terminated and continuity of business is not threatened. The control of the family business lies with the karta. He takes all the decisions and is authorized to manage the business. His decisions are binding on the other members. The inclusion of an individual into the business occurs due to birth in a Hindu Undivided Family. Hence minors can also be members of the business. Minor members Continuity Control Formation Liability

9. MERITS

10. Effective control Continued business existence The death of karta will not affect the business as the next eldest member will take up the position. Hence continuity is not threatened. Limited liability of members The liability of all the co parceners except the karta is limited. Their risk is well defined and precise. Increased loyalty and cooperation Greater sense of loyalty towards one another. Pride in the growth of business links to the achievements of the family. Thus helps to secure better cooperation from all the members. The karta has absolute decision making power. This leads to prompt and flexible decision making.

11. LIMITATIONS

12. The common problem faced by the joint Hindu family is of limited capital , which is largely dependent on the ancestral property and throws limits for growth and expansion. The Karta is not only loaded with responsibility of the decision making and running the business , but also distressed due to unlimited liability . The business debts can be repaid using his property. The family members might sometimes oppose the decisions of the Karta . This may create conflicts among the family members and may even lead to loss of control and split in the family unit. Given that the Karta cannot be the specialist in all areas of management , the business might suffer due to his unwise decisions . His incapability in decision making may lead to meager profits or sometimes even losses for the organization . Limited Resources Unlimited Liability of Karta Dominance of Karta Limited Managerial Skills

13. EXAMPLES

14. Haldiram’s Food International Limited today is recognized as a Star Export House, by the Directorate General of Foreign Trade ,a department working under the Ministry of Commerce ,Government of India. In 1997, Haldiram’s forayed into milk and milk product industry with products such as khowa, Ghee& Butter Milk, the manufacture of Extruded foods such as vermicelli and 3-D Snacks. . In 2014, Haldiram was ranked 55th among India's most trusted brands. His sons, Rameshwar and Moolchand are also the major shareholders in the business. Haldiram's was founded in 1937 by Shivkisan Agrawal as a retail sweets and namkeen shop in Bikaner, Rajasthan. In 2008, the chairman of the company's Nagpur branch was Shivkishan Agarwal. Haldiram’s Bhujiawala became operative and soon it became a hot favorite of all Nagpurians. This was followed by a chain of retail outlets & showrooms catering to the varied tastes of all segments of society.

15. 1 2 3 4 Tata Sons Limited is the bulk shareholder of the Tata group of companies. About 66% of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. Tata Sons is the owner of the Tata name and the Tata trademarks, which are registered in India and several other countries. Tata Sons is the owner of the Tata name and the Tata trademarks, which are registered in India and several other countries .

16. This Was Presented to You by Nishanthini N.K.