Commercial Applications
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
Answer
Both I and II are correct
Reason — Statement I is correct because the secrets of business are known to the karta only — there is no danger of trade secrets being disclosed to outsiders. This feature is known as 'Utmost Secrecy'. Statement II is correct because the karta is the head of the family and the head of the Joint Hindu Family business.
Related Questions
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
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