Question

Distinguish between.

Partnership Firm and Joint Hindi Family.

Answer 1

Points	Partnership Firm	Joint Hindu Family
1. Meaning	A partnership firm is controlled by two or more persons called ‘Partners’.	In Joint Hindu Family 'Firm, the Joint Hindu Family conducts business according to Hindu Laws.
2. Number of members	A minimum of two members are needed for starting a business. The maximum number is fifty.	Membership of the firm depends upon the birth and death in the family. There Is no limit on membership. A person adopted into the family also becomes a member.
3. Registration	Registration is not compulsory in India, but it is compulsory in Maharashtra.	Registration is not compulsory.
4. Liability	The liability of partners is unlimited, joint, and several.	Karta has unlimited liability and Co-parceners have limited liability.
5. Capital	Comparatively more, as it is contributed by all partners.	The whole capital comes from ancestral property.
6. Secrecy	Secrets share by all partners.	Secrecy can be maintained within the family.
7. Management	All partners take part in the management of the firm according to their skills.	Karta looks after the management of the business. All Co-parceners follow his decision.
8. Stability	The stability of business is affected by death, lunacy, or insolvency of a partner.	Comparatively, more stable as a business is not affected by the death of Karta or Co-parceners.
9. Act/Law	Partnerships are governed by the Indian Partnership Act, 1932.	Joint Hindu Family firm follows the Hindu Succession Act, 1956.
10. Formation	A partnership firm is formed by an agreement between two or more persons.	Joint Hindu Family Firm comes into existence by the operation of Hindu Laws.
11. Sharing of profit	The profits and losses are shared by partners as per the ratio given in the agreement.	The profits and losses are shared between Karta and Coparceners.
12. Inspection of books of accounts	partner has a right to inspect books of accounts of the firm.	A Co-parcener has no right to inspect books of accounts of the firm.
13. Implied authority	Every partner has implied authority to act on behalf of the other partners.	Karta has implied authority to act on behalf of the firm.