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Multiple choice organization of commerce and management ownership structures - sole proprietorship and joint hindu family business hindu undivided family business introduction to huf joint hindu family business

Which of the following can be treated as advantages of HUF form of business?

  1. A HUF business is not affected by the insolvency or death of any member including that of karta.

  2. An inefficient karta can also do harm to the business.

  3. The continuity of business is always under threat It may be due to a small rift within the family and if aco- parcener asks for a partition the business is closed.

  4. Since the karta has absolute freedom to manage the business, there is scope for him to misuse it for his personal gains.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A HUF business is not affected by the insolvency or death of any member including that of karta- this can be treated s advantage of HUF form of business. In a Hindu Undivided Family business only the male members get a share in the business by virtue of their being part of the family. A Hindu Undivided Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent. It came into existence as per Hindu Inheritance Laws of India.

Multiple choice organization of commerce and management ownership structures - sole proprietorship and joint hindu family business hindu undivided family business introduction to huf joint hindu family business

Which of the following can be treated as disadvantages of HUF form of business?

  1. An inefficient karta can also do harm to the business.

  2. In a HUF business the male members of three successive generations are involved which may leads to conflict between generations.

  3. The continuity of business is always under threat. It may be due to a small rift within the family and if a coparcener asks for a partition the business is closed.

  4. All of above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
In a Hindu Undivided Family business only the male members get a share in the business by virtue of their being part of the family. A Hindu Undivided Family is an extended family arrangement prevalent among Hindus of the Indian subcontinent. It came into existence as per Hindu Inheritance Laws of India. Following can be treated as disadvantage of HUF form of business:
a) An inefficient karta can also do harm to the business.b) In a HUF business the male members of three successive generations are involved which may leads to conflict between generations.
c) The continuity of business is always under threat. It may be due to a small rift within the family and if a coparcener asks for a partition the business is closed.