Q: Explain Hindu Undivided Family business ?

Ans: Hindu undivided family ( HUF ) is also known as Joint Hindu Family business is a type of family  business  which comprises of all persons  with " Karta " being the head of the family , whereas other family members are coparceners . It is governed by Hindu law. Karta manage all day to day affairs of the business .

 There are usually two systems of HUF,namely
Dayabhaga system :

1. In Dayabhaga System, Coparceners include both Male as well as female of the family .

2. The Mitakshara members includes only male members in the Hindu Undivided family business but this has been amended via the Hindu Succession Act , 1956 which provides equal rights to both male as well as female members.

Features -

1. Hindu Undivided family business requires minimum two family members to form a HUF.

2. The members in the business of Hindu Undivided family will be admitted by birth only . Thus, Hindu Undivided family business includes minors too .

3. Unlike Karta , the liability of all members in Hindu Undivided family business is limited to their shares that they have in the business i.e. , limited liability .

4. The Entire control in Hindi Undivided family business remains with Karta ,and thus Karta can make independent decisions , and the actions of Karta will be legally binding .

5. HUF continues with  perpetually i.e. , after the death of karta , the eldest member will be the Karta . However , the Hindu Undivided family business can be dissolved or wound up if all the members give their consent .

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