Hola, Friends!
India is a country which is famous for its culture, old traditional values and beliefs. Citizen of this country show concern towards each fellow citizen and consider themselves as a family. Thus, this sense of belonginess of Indian citizen towards each other has led to the emergence of family where the members of the families love each other and shower respect towards their elder as well.
Hence, the family has given rise to an act for business which is termed as Hindu Undivided Family. It is basically a group of people where all the members have been descended from a common ancestor. The eldest member is known as Karta who is having all the powers and control to take decision related to the business which the family is doing while the other members are known as Coparceners who follows the footsteps of their Karta.
While, this law is not only meant for Hindu religion but in reality, Hindu, Jain, Buddhist and Sikh families also comes under this act. This act is only being use from the business point of view and is found only in India. As we Indians follow old traditional values and culture, therefore it is considered as one of the oldest forms of business being carried and owned by the members of family only. It uses to be governed by the Hindu Law and one can get admission here by taking birth in the religions mentioned above or if any members from the religion adopts someone.
Each and every coin has two aspects. Thus, in the same way the case is here as well. There are so many benefits of this act which are as follows:
· Karta is the sole decision maker of the business so he has the effective control upon the coparceners as he does not face any interference as such.
· The business has continuity in nature as even if the Karta dies then also all the powers and responsibilities get shifted to another eldest member. Hence, business does not get affected with any such miss happenings.
· Coparceners have limited liability in the business as all the liabilities comes under Karta only. So, coparceners enjoy being with limited liabilities.
Now, let’s discuss about some drawbacks which is being available in this act.
· As the Karta is the sole decision maker. Therefore, no other members can take decision which leads to the dominance of Karta.
· All the properties are of ancestors. Therefore, the business has limited resources only.
· All the members of the business are of the same house. Therefore, they enjoy limited managerial skills.
· All the members of the family are involved in the business. Hence, it becomes difficult for them to comprehend the difference between the personal life and the professional life.
Apart from these disadvantages, there are many positive aspects of this act as well. One of the benefits is the Tax benefit as the members of the Hindu Undivided Family gets the advantage to pay less tax because of the benefits being availed with it.
But there is some issue with the act which is the western culture. Indians are adopting the western culture nowadays due to which all the people start living in nuclear family and slowly the concept of joint Family is diminishing which has to be taken care and should not stop to follow our old tradition otherwise we will be unaware of these concepts and we will never get the benefits from it. As a happy family is only a healthy family and family without elder ones are incomplete.