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Question
Distinguish between the following.
Joint Hindu family firm and Joint stock company
Solution
| Basis of Difference | Joint Hindu Family Firm | Joint Stock Company |
| Governance | Governed by the Hindu laws | Governed by the Companies Act 1956 |
| Number of members | Minimum: 2 Maximum: No limit |
In case of a private company: Minimum: 2 Maximum: 50 In case of a public company: Minimum: 7 Maximum: No limit |
| Minor | Minors can be members | Minors cannot be members |
| Management and Control |
Managed and controlled by the Karta. |
Managed and controlled by the managing director. |
| Liability | Karta has unlimited liability; other members enjoy limited liability. |
Shareholders have limited liability to the extent of the unpaid amount on the shares held by them. |
| Formation | Easy to form, as few legal formalities need to be fulfilled. |
Comparatively difficult to form, as several legal formalities need to be fulfilled. |
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Explain the following term/concept:
Karta.
Study the following case situation and express your opinion:
Mr. Raghunath is running a business from the last 30 years. This business is ancestoral business of Mr. Raghunath. Kiran and Naman, two sons of Mr. Raghunath are helping him along with their wives.
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Karta is the sole manager of ‘Joint Hindu Family Business’.
Give one word/phrase/term.
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The members of the Joint Hindu Family firm.
