Commercial Applications
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
Sole Proprietorship
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Answer
Perpetual succession
Reason — The existence of a joint Hindu family business is not threatened by the death or incapacity of any member or the karta. It is stable and comes to an end only after the total breakdown of the joint family. This feature is known as continuity or perpetual succession.
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Related Questions
Statement I: The sole proprietorship is completely free to take decisions and to implement them.
Statement II: Sole proprietor doesn't enjoy complete freedom of action.
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Statement I: The proprietor is personally liable for all the debts of the firm.
Statement II: The life of sole proprietorship is uncertain.
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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.
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The disadvantages suffered by Joint Hindu Family business are:
- Hasty Decisions
- Unlimited Liability
- Limited Capital
- All of these