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Distinguish between partnership and Joint Hindu Family business.

Partnership

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Answer

S.No.Basis of DistinctionPartnershipJoint Hindu Family Firm
1.Basis of formationAgreement.By birth.
2.Number of membersTwo or more; maximum: 50.Two or more, no maximum limit.
3.Liability and RiskUnlimited partners bear risks jointly and individually.Limited except for the Karta.
4.Position of minorCannot be partner.Can be coparcener.
5.ManagementBy all partners or by any one of them acting for all.Only by the Karta.
6.Division of profitsAmong partners in agreed ratio.Equal share for all.
7.Legal existenceDissolved with death, etc. of a partner.Not dissolved by death, etc. of a member.
8.Application of lawThe Partnership Act.Hindu Succession Act.
9.RegistrationDesirable but not compulsory.Not required.

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