Commercial Applications
Which of the following options regarding Joint Hindu Family Business is wrong?
- Basis of formation : By Birth
- Division of profit : Unequal share
- Management : Only by Karta
- Application of law : Hindu Succession Act
Sole Proprietorship
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Answer
Division of profit : Unequal share
Reason — In joint Hindu family business, the division of profit is in equal shares among all members, not unequal. The other options are correct — membership is acquired by birth, management is by the karta, and it is governed by the Hindu Succession Act.
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Related Questions
Statement I: The existence of a joint Hindu family business is not threatened by the death or incapacity of any member or the Karta.
Statement II: The Joint Hindu family comes to an end only after the total breakdown of the Joint family.
- Both I and II are wrong
- Both I and II are correct
- Only I is correct
- Only II is correct
Which of the following options regarding Proprietorship is wrong?
- Basis of formation : No agreement
- Number of members : No maximum limit
- Management : By the Sole Proprietor
- Application of Law : The Contract Act
Statement I: The capital of joint Hindu family business is limited to the ancestral property.
Statement II: The Karta of joint Hindu family business may not be competent to manage the business.
- Both I and II are correct
- Both I and II are wrong
- Only I is correct
- Only II is correct
Assertion (A): Sole proprietors have unlimited personal liability for the business debts.
Reason (R): Personal assets of the owner may be used to settle business obligations in case of financial difficulties.
- A is true but R is false.
- A is false but R is true.
- Both A and R are true and R explains A.
- Both A and R are true but R does not explain A.