Commercial Applications
The disadvantages suffered by Joint Hindu Family business are:
- Hasty Decisions
- Unlimited Liability
- Limited Capital
- All of these
Answer
All of these
Reason — The joint Hindu family business suffers from several disadvantages including limited capital (limited to ancestral property), unlimited liability of the karta, hasty decisions (due to the karta being overburdened), limited managerial ability, responsibility not matched with reward, source of conflict, and scope for misuse.
Related Questions
In a joint Hindu family business, the karta passes away unexpectedly. However, the business operations continue without interruption as the eldest son takes over the role of karta. Which feature of joint Hindu family business does this demonstrate?
- Perpetual succession
- Limited liability
- Hasty decisions
- Ease of formation
Statement I: All the male members of a Joint Hindu family business are known as coparceners.
Statement II: The oldest member is known as Karta.
- Only I is correct
- Both I and II are correct
- Only II is correct
- Both I and II are wrong
Statement I: Expenses of management are high in Joint Hindu Family Business.
Statement II: The Karta alone is authorised to take all important decisions of the family business.
- Both I and II are correct
- Only I is correct
- Only II is correct
- Both I and II are wrong
How profit is distributed in Joint Hindu Family Business?
- Men have more share than women
- The older members of family receives more profit than younger members
- Equal shares for all of them
- Only the Karta has all the profit