Commercial Applications
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
Answer
Only II is correct
Reason — Statement I is incorrect because expenses of management are low (not high) in joint Hindu family business, as the karta is the sole manager and controller of the business — this feature is known as 'Economy'. Statement II is correct because the karta alone is authorised to take all important decisions of the family business, and their decision is final and cannot be challenged.
Related Questions
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
The disadvantages suffered by Joint Hindu Family business are:
- Hasty Decisions
- Unlimited Liability
- Limited Capital
- All of these
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
Statement I: The secrets of business are known to the Karta only.
Statement II: The Karta is the head of the family.
- Both I and II are correct
- Only II is correct
- Only I is correct
- Both I and II are wrong