This form of business is found only among the Hindu joint families in India. Following the death of the father, the members of his family inherit his business along with other property. It is only after the death of the father that his inheritors will acquire legal title to the ownership of his business. The joint family property is known as coparcenary’s property and the joint owners are coparceners. This inheritance right is enforceable by the principle of survivorship that is as long as one is alive. Other basic feature is business is managed by the head of the family. The liability of ‘Karta’ is unlimited.
Advantages:
Male family members are assured of some income from business.
Opportunity for all to gain experience in business.
Business not to be dissolved due to death of any member.
Continuity of business
Membership of business without any formality.
Minor member cannot be adjudged as insolvents.
Registration compulsory.
Limitations:
Only head of the family is privileged to head the management of business
Unless a member serves connection with family business he cannot question the authority and decision of ‘Karta’ the head of the family.
One severing connection with business cannot ask for accounts of past profits and loses.
Participants