Distinguish between a Joint Hindu family business and partnership.
Joint Hindu Family Business and Partnership are two distinct forms of business organisation that differ on several grounds.
Governing Law: Joint Hindu family business is governed by Hindu Law and the Hindu Succession Act, 1956. Partnership is governed by the Indian Partnership Act, 1932, which defines it as the relation between persons who have agreed to share profits.
Basis of Membership: In Joint Hindu family business, membership is determined by birth in a particular Hindu Undivided Family (HUF). Three successive generations can be members. In Partnership, membership is based on an agreement between persons to share profits of the business.
Management and Control: Joint Hindu family business is controlled by the Karta, who is the eldest member and head of the family. In Partnership, the business is carried on by all or any one of them acting for all.
Liability: In Joint Hindu family business, the Karta has unlimited liability and his personal property can be used to repay business debts. Other members have limited liability to their share of co-parcenery property.
Minor Members and Existence: Joint Hindu family business is found only in India and allows minors to be members by birth. Partnership emerged to meet needs of greater capital, varied skills, and sharing of risks.
Explanation
This answer distinguishes between the two forms using only the provided context. Key points of distinction include: (1) Governing Law - Hindu Law vs Indian Partnership Act 1932; (2) Membership basis - birth in HUF vs agreement; (3) Management - Karta controls vs all/any partner acting for all; (4) Liability - Karta's unlimited vs members' limited liability; (5) Minor membership allowed in JHF by birth; (6) JHF is unique to India. The textbook explicitly states these features for JHF while Partnership is defined by the agreement to share profits under the Partnership Act.