Company Law Notes - Distinction between a Hindu Undivided Family Business and a Company

Distinction between a Hindu Undivided Family Business and a Company

  1. A Hindu Undivided Family Business consists of homogenous (unvarying) members since it consists of members of the joint family itself. A company consists of heterogeneous (varied or diverse) members.
  2. In a Hindu Undivided Family business the Karta (manager) has the sole authority to contract debts for the purpose of the business, other coparceners cannot do so. There is no such system in a company.
  3. A person becomes a member of a Hindu Undivided Family business by virtue of birth. There is no provision to that effect in the company.
  4. No registration is compulsory for carrying on business for gain by a Hindu Undivided Family even if the number of members exceeds twenty [Shyamlal Roy v. Madhusudan Roy, AIR 1959 Cal. 380 (385)].Registration of a company is compulsory.
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