Question

The Karta in Joint Hindu family business has

Options

• Limited liability

• Unlimited liability

• No liability for debts

• Joint liability

Answer 1

Karta is the eldest male member of a Joint Hindu family who is responsible for decision making in the family business. He needs no permission from the coparceners (joint heirs) before taking any action. Since the Karta has complete control over the business, his liability is unlimited. On the other hand, the liability of all coparceners is limited to their share in the family business.

Hence, the correct answer is option Unlimited liability.