Partnering with a business that has complementary abilities and resources, such as finance, distribution channels, or technology, makes good sense. A joint hindu family is normally joint in worshipkitchen business. A joint family also undivided family, joint household, extended family system is a large undivided family where more than one generation live together in a common house. Disadvantages of joint hindu family business 1 limited. Indian culture and tradition is well known to various other countries. The disadvantages of living in a joint family are mentioned below. Of course the classic advice on this is not to mix business with family. However, according to carlos garcia, the franchisor of total clean, franchising is not an easy way to grow your business. Family companies come with their set of advantages and disadvantages. Joint hindu family business has generally limited financial and managerial resource.
Joint hindu family business an affectionate business. So if you are the distributor, you dont need to develop the product. This system could prevail for decades for several reasons. It does not have any separate and distinct legal entity from that of its members. All the male members are blood relatives and all the women are either mothers, wives, unmarried daughters, or widowed relatives, all bound by the common sapinda. The head of the family is the head of the business also. Advantages and disadvantages of living in a joint family. Sometimes, family members arent truly interested in joining the family business, but do so anyway because its expected of them. The new firm will have an increased market share, which helps the firm gain economies of scale and become more profitable. In joint hindu family business, only manager has the implied authority. The joint hindu family business or the hindu undivided family huf is a unique form of business.
Basically, there are two kinds of members in a joint hindu family business, i. Hindu undivided family is involved in a business, giving the ownership to head of the family. Even daughter in lawswidowed daughters who has returned back to their parental side are part of a hindu joint family. The advantages and disadvantages of a family business. Sabine reddy school of business administration, wayne state university. Why is joint hindu family business established in india. Identify the most important details that support the main ideas. Having a joint account requires the presence of trust between or among the account holders. The manager of the hindu joint family or karta is required to declare all sources of income in form tj. The hindu joint family is the normal condition of the hindu society. Write in your own words and avoid copying phrases and sentences from the article unless they are direct quotation. A business, which continues from one generation to another generation is known as joint hindu family business or firm. Typically, one partner has a product, the other has a distribution network.
It is governed and dictated by the hindu law, which is one of the several religious laws prevalent in india so who all are members of such an organization. Some suggestions for family business planning, startups. Even though there are many changes that exists in the culture of indians this joint family system is still available in the minds of the people. Even within india its existence is restricted to only certain parts of the country. A partnership usually involves a continuing, longterm business relationship, whereas a joint venture is based on a single business project. The merger will also reduce competition and could lead to higher prices for consumers. There is no right in a minor or an adult member of the family to bring a. Joint bank accounts have their advantages and disadvantages. The joint hindu family business is a distinct form of organisation peculiar to india. A joint family may encompass countless generations. Features merits introduction limitations examples 3.
The traditional assumption behind such a deduction is that every hindu family is normally a joint family. Upload and share your knowledge on business related things. The joint hindu family firm is the next noncorporate, group ownership form of family business operative in india. Rut they deal only with a norm and not the reality. The operation of law creates a joint hindu family business. It is a specific type of organization that is restricted to certain parts of india. Joint hindu family business is the oldest and specific form of business organization found only in india. Let us look at some of the disadvantages of the joint. Consider these key points to determine if starting or joining a family business is the right decision for you. Before the multinational corporation, there was family business. There are innumerable advantages of the joint venture. Sometimes, family members arent truly interested in joining the family business.
Advantages and disadvantages of family entrepreneurship. What are the aims and objectives of a joint hindu family. In a joint family system basically all the members of the family live together under one roof and are related to each other. I read somewhere that 62 percent of the gross national product of the western world is produced by family businesses. India has become 7 th largest economy in the world and by 2025, it will become 3 rd largest economy in the world further, the government of india has initiated various new regulations and policies in order to improve the environment and make doing business in india a lot easier than what it used to be before in order to facilitate registration of wholly owned subsidiary in india. The property of a joint hindu family may consist of ancestral property, joint acquisitions self acquisitions thrown into the common stock however, even in the absence of any property, the joint hindu family may still be in existence as a joint hindu family damodar krishnaji nirgude v. Property belongs to the family as a whole and all family income is pooled together. It is a specific form of business organization found only in india. Therefore, it cannot undertake big and risky business. All business affairs are dealt with by the senior most male member of the hindu family. In a joint account, its easier to access the funds when the spouse passes away. Living in a joint family, you may have lack of leadership and decision making qualities as head of the family will decide and does all the important decisions. There is always a lack of motivation among the members to work hard. Essays, research papers and articles on business management.
The following is a list of the pros and cons of having joint accounts. Ive done business with my wife, daughter, soninlaw, and various mixtures of those. Essays on business management, notes on business, articles on business development, list of definitions, class notes, study guides, presentations, research papers, project reports on business studies, latest techniques used for improving your business, acts, helpful notes, biographies of eminent business. Mallappa mahalingappa, the supreme court while pointing out the distinction between the joint family business and partnership firm observed.
Indias 10 oldest family owned businesses siliconindia. This allows the business owner to focus on supporting the franchisees from one location and ensures that all their customers needs are met. Advantages and disadvantages of living in a joint family a joint family was a phenomena found only in india of the bygone days. Partnerships and joint ventures can be similar but in fact can have significantly different implications for those involved. The pros and cons of a family business often show that family loyalty happens above everything else, but that can be a good thing when others are included in the business process. Joint hindu family business is a distinct type of organisation which is unique to india. There are many good business and accounting reasons to participate in a joint venture often shortened jv.
Such an assumption has been encouraged by the study of hindu law and scriptures where the normative hindu family is always joint. Basic information 1 2 name of hindu joint family as registered with lhdnm. A joint hindu family business is not dissolved on the death, lunacy or insolvency of any of the copartners. A hindu joint family or hindu undivided family huf or a joint family is an extended family arrangement prevalent among hindus of the indian subcontinent, consisting of many generations living under the same roof. Before the industrial revolution, there was family business. To every action, there is an equal and opposite reaction. Tamil culture joint family system joint family system is one of the great cultures of indian people.
Opening an indian subsidiary advantages and disadvantages. The joint hindu family business is controlled under the hindu law instead of the. A hindu joint family means what in any system of law prevailing in india is known as a hindu joint family or coparcenary. In joint hindu family business, there is no restriction on the maximum number of members. Hindu undivided family huf the joint hindu family business or the hindu undivided family huf is a unique type of business entity. This really meant that, the parents with all their children and grandchildren stayed together under one single roof. Well, any person born into the family boy or girl up to the next coming three generations is a part of. A merger occurs when two firms join together to form one. What is the advantage and disadvantage of joint family in. What are the pros and cons of working for a familyrun business.
It allows only the male members to be coparceners in the business. In a joint hindu family business no member of the family can say that he. The joint hindu family business is an affectionate business and a distinct form of organization peculiar to india. It refers to a form of organization wherein the business is owned and carried on by the members of the hindu undivided family huf. It is one of the oldest forms of business organisation in the country. Joining a family business is tricky business because money is always on the table. Though there are a lot of advantages of living together in a joint family, it has some disadvantages also. The importance of family business as an academic discipline. It does not arise out of the operation of law as in the case of joint hindu family. Forms of business organisation business environment 28 3.
A joint family or undivided family is an extended family arrangement prevalent throughout the indian subcontinent, particularly in india, consisting of many generations living in the same household, all bound by the common relationship hindu undivided family huf is treated as a person under section 231 of the incometax act, 1961 herein after referred to as the act. Others members of the family are known as coparceners, who become the member of the business right at the time of their birth. Characteristics of a joint hindu family business 3. Advantages and disadvantages of joint family essay in. The eldest male member of the joint family is the karta, who is responsible for managing and controlling the business operations. Advantages of joint ventures are speed, access, sharing of resources and the leveraging of underutilized resources, high profits, back end income, low or no risk opportunities and massive leverage disadvantages of joint ventures are the possibility of being ripped off or disappointed by unscrupulous and unprofessional jv partners, and hurting your reputation andor customers. Before the enlightenment of greece and the empire of rome, there was family business,said willium o hara, an academician specializing in family business to demonstrate the longevity and endurance of the family businesses tradition. The meaning, advantages and disadvantages of joint family has been discussed in this article. A joint hindu family is headed by a karta, who is normally the eldest living male member of the family. However, the disadvantages also tag along in the process. What are the advantages and disadvantages of a joint. What are the advantages and disadvantages of franchising. A family business comes with its own set of unique advantages and. Karta and his legal position in joint hindu family.
For the success of a family business, one must overcome those challenges and capitalize on the opportunities. Joint hindu family business is a different type of organization, which is found only in india. In the public sector, employees that fit into this category would simply be fired. Without sharing the family business to external parties and using the family business profit for the well being of particular family. This is special form of business organization, which now exists only in india. Joint hindu family business class 11 linkedin slideshare. What are the features of a joint hindu family business. It is governed by the hindu law, which is one of the several religious laws. Thanks for the a2a as posted in the picture, the joint hindu family business is a family business involves only the members of the family.
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