The points highlighted below are the important characteristics of the Joint Hindu family business. Two systems which governs membership in the family business, are Dayabhaga and Mitakashara.
- Formation: In order to form a joint Hindu family business, there ought to be at least two members in the family and ancestral.
|Gender Equality in the Joint Hindu Family a Reality
With the announcement of the Hindu Succession (Amendment) Bill 2004 in Parliament on December 20, 2004, the Government has leaped a step in fulfilling its commitment towards gender equality formed in National Common Minimum Programme (NCMP). The amendment of the Bill of the Hindu Succession Act of 1956 enhances women equal rights in the inheritance of ancestral wealth, which was reserved only for male heirs in the past. It is certainly, a noteworthy step in bringing the Hindu Law of inheritance in concurrence with the constitutional principle of equality. The enactment of the proposed legislation would as well execute the recommendations of the National Commission for Women (NCW) considerably to help bring social change in society. The Bill seeks to eradicate the discrimination as mentioned in section 6 of the Hindu Succession Act, 1956 by giving equal authority to daughters in the Hindu Mitakshara coparcenary property as the sons have. In the Kerala model, the idea of coparcenary was abolished and according to the Kerala Joint Family System (Abolition) Act, 1975, the heirs (male and female) do not acquire property by birth but can only hold it as tenants as if a partition has been done. Andhra Pradesh (1986), Tamil Nadu (1989), Karnataka (1994) and Maharashtra (1994) also reinforced laws, where daughters were granted 'coparcener' rights or a claim on ancestral property by birth as the sons do. Equality for women, though a weaker sex is not just a matter of impartiality, but a step taken for the modernisation of Indian society and the pragmatic nature of our civilisation. (PIB Features)
The business does not demand any agreement since membership is obtained by birth in the family. It is governed by the Hindu Succession Act, 1956.
- Liability: The liability of all members excluding the karta is limited to their share of co-parcenery assets of the business. The karta, on the other hand, has unlimited liability.
- Control: The management of the family business and the decision making authority is bestowed on the karta. The other members of the family are bound by his decisions.
- Continuity: There is continuity of business even after the demise of the karta. The next eldest member of the family takes up the position of karta, thereby stabilizing the business. On the controversy, the business can also be terminated with the mutual consent of the members of the family.
- Minor Members: Additional members can be included into the business which occurs at birth in a Hindu Undivided Family. Hence, minors can also be members and legal hiers of the business.