This article will help you to learn about the difference between partnership and joint Hindu family business.
Difference between Partnership and Joint Hindu Family Business
Partnership Business
1. Formation:
A partnership business comes into existence by mutual contact between the partners.
2. Admission of a Member:
In partnership, a member is taken into the business by an agreement.
3. Members: Males or Females:
In a partnership, both males and females can be partners.
4. Minor as Member:
In a partnership, minor cannot become co-partner though he may be admitted to the benefit of partnership.
5. Registration:
Registration of the partnership is not compulsory but it is expected to be registered so that partners may exercise their rights between themselves and against outsiders.
6. Liability:
In partnership, all the partners are liable jointly and severally for all debts and obligation of the firm to an unlimited extent.
7. Implied Authority:
In partnership, implied authority vests equally in all the partners.
8. Maximum Number of Members:
In partnership, maximum number of member is 20.
9. Dissolution:
A partnership may be dissolved on the death, lunacy or insolvency of any one of the partners.
Joint Hindu Family Business
1. Formation:
Joint Hindu Family firm is created by operation of law.
2. Admission of a Member:
In Joint Hindu Family business, one becomes the member by birth.
3. Members: Males or Females:
In Joint Hindu Family business, only males can be co-partners and not females under the Mitakshara law. But under Dayabhaga law, both males and females can be members under certain conditions.
4. Minor as Member:
In Joint Hindu Family firm, minor is a partner.
5. Registration:
Registration of Joint Hindu Family business is not required.
6. Liability:
In Joint Hindu Family business, the liability of co-partners is limited and liability of Karta (manager) is unlimited. The Karta (manager) is not only liable to the extent of his share in the business but his separate property is equal attachable and amount of debt can be recovered from his separate property.
7. Implied Authority:
In Joint Hindu Family business, only manager has the implied authority.
8. Maximum Number of Members:
In Joint Hindu Family business, there is no restriction on the maximum number of members.
9. Dissolution:
A Joint Hindu Family business is not dissolved on the death, lunacy or insolvency of any of the co-partners.