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Monday, 2 November 2020

Discuss in detail about Hindu undivided family business

 HUF is an entity formed automatically by members of the common ancestry including their wives and daughters. A HUF cannot be formed by a group of people who do not constitute a family. As such a joint Hindu family is in India is in fact and by default, a HUF. A HUF enjoys a separate entity status under the income tax act. The income tax act considered HUF as a separate entity if the joint family wishes to register itself as such for reporting income under the following heads: profits from business or profession; income from house property; capital gains; income from other sources.since under the income tax act HUF is a separate entity from the joint family that comprises it, a HUFcannot earn income from salary. We are concerned here with a business owned by a HUF for simply starting a joint Hindu family business or Hindu undivided family business. 

Before we describe its features it would be appropriate to clarify if you point on its meaning

The meaning becomes sclera with reference to the prevalence of the joint family system in India. For the family is formed by marriage. Let's call it the first generation. Marriage in most societies is a means of creating progenies/children. Thus, there is a second generation comprising the siblings. These siblings grow up, get married, and have children. Now there is a third-generation a Consortium of cousins. In the paternal linkage,thus there his a grandfather, father, and grandchildren. These three successive generations of an undivided family are known as HUF. Secondly, the word Hindu is considering the definition of HUF includes Buddhism Jain and Sikh families as well. Thirdly, for the purposes of understanding HUF's features as a business entity, another important relevant law is the Hindu succession act,1956.

Partnership employee's contractual co-ownership of business.

it is a relationship between two or more persons who agree to share the profits of a business. The business may be carried on by all or by some of the partners called active partners for and on behalf of all. The contract-an agreement enforceable at the law-called 'deed' is the essence of a partnership. It may be verbal or written. It simplifies the basis of the association of the persons in a partnership business example capital contribution profit sharing, etc. That deed may be registered in India under the Indian partnership act, 1932.

Drawing on its name, the limited liability partnership form of business organization is the one where the liability of the partners is limited. However, there is much more of this form. It has to be mandatorily incorporated/registered under the limited liability partnership act, 2009. The ministry of Corporate Affairs, the Apex body of regulation of company form of business organization in India oversees the governance of the LLP to.for the purposes of compliance with the regulation does impost the LLP act provides for designated partners. Upon incorporation coma, LLP becomes a separate legal entity and has an identification name and identification number as well as life of its own much the same way as the actual success of the company. the features of mandatory incorporation in separate legal entity of the LLP makes it a hybrid form of business organization that is containing the features of both the corporation form as well as the proprietary form of business organization.

Company form of business organization is a flag bearer of corporate businesses

the company indeed is a body corporate coma having in existence independent all its members. It exists in the contemplation of law has a distinct name and address registered office and identification number. the word company literally implies an association of two or more persons. However, as a legal artifact, there can be even a one-person company. In fact, the office has been the most recently introduced form of business organization in India vide the companies act 2013. It is still in the UN emerging status. Yet it is being held as a likely catalyst in unleashing the intrapreneurial spirit in India. Recall that we posited sole proprietorship as the classical hallmark of entrepreneurship samikaran is likely to be its corporate form. In addition, the companies act 2013 also provides for the incorporation of a small company in acknowledgment of the role of small-scale enterprises in India. interestingly the act also provides for the incorporation of a dormant company that may be created for a future project or to hold an asset or intellectual property and has no significant accounting transaction.

in order to make the system of diffuse ownership of the joint-stock companies and their management work and elaborate system of corporate functioning and the regulation of capital market has to be in place to stop the companies act 2013 focuses on the former; and the securities and exchange board of India act 1992 focuses on the latter. a company has to file a memorandum of association and articles of association along with an application for incorporation. The MoA, among other things, spells out the objectives of the company and its business. The AoA focuses on its internet regulation. the company solids its capital contribution by the issue of a prospectus. There are elaborate provisions in the companies act and the SEBI act to ensure that the prospectus contains such true and correct information as may enable the public to form an informed judgment on whether or not to invest in a company. a common man can avail of the services of the investment advisers in this regard. Then there is a recruitment of the state lottery audit of the accounts of a company and publication of its quarterly results to keep the investors well-informed. The savi also oversees the subsequent trend trading of the company shares and the contact of listing by which the shares of a company are put up for trading on a stock exchange. the listing agreement among other things, also and joints apan the complaints to carry on business in an ethical transparent, and accountable manner.

Publicly traded/listed companies have to meet stringent criteria of both the companies' act and the SEBI. This increases the cost of compliance in contrast private companies have lesser compliance to meet and have greater flexibility in their internal functioning. The law provides their privileges to the private companies because these are closely held in the owners have greater opportunity to exercise control over the management of this company.

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