What do you mean by Joint Hindu Family Firm?

In India, a substantial number of businesses are run by Joint Hindu Families (JHFs), which are essentially individual entrepreneurs with virtually all of the benefits and drawbacks of a sole proprietorship. A JHF is created through the operation of the legislation. It is an example of JHF when a person’s company is continued by male members of his family after his death. Except in West Bengal, where the Dayabhaga system of Hindu Law governs, the Mitakshara system of inheritance governs the remainder of India, under which three successive generations in the male line receive the ancestral property concurrently from the moment of their birth. As a result of their birth in the family, the son, grandson, and great-grandson become joint proprietors of ancestral property.
They’re known as interest co-partners. The Hindu Succession Act of 1956 has expanded the line of co-partners interest to include female relatives of the dead partner, as well as male relatives claiming via such female relatives. The family company is considered heritable property and so has a co-partner stake. Only after the father dies, the male heirs become members of the Dayabhaga Law.

The business is managed by the father or another senior family member, who is known as Karta or Manager; other family members have no authority to participate in the management. The Karta is in charge of the family’s income and expenditure, as well as the excess if there is any. The other family members are unable to dispute Karta’s authority, and their only option is to dissolve the JHF via mutual consent. If Karta has misappropriated business money, he must reimburse the other co-partners to the amount that their portion of the joint property has been misappropriated. The Karta can borrow money to run the firm, but the other partners are only accountable for the amount of their stake in it. In other words, Karta’s liability is limitless.

A Hindu Joint Family can form alliances with others. Outsiders, on the other hand, are not permitted to join the JHF. The death of a family member does not result in the dissolution of the company or the family. Only mutual consent can lead to the dissolution of the Joint Hindu Family. Male adult members have the right to demand that the JHF’s property be divided. A co-partner has no right to seek past accounts after a divorce.