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Difference between partnership and huf

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It is open to the manager of a Joint Hindu family, as representing the family, to agree to become a partner with another person. And therefore any remuneration received by Karta would be the personal income of Karta and not the income of the HUF as there is no real connection between the investment of the assets of HUF and remuneration received by Karta. CIT for A. In fact, this issue was very much under litigation even at the time of old provision, and it was held that salary paid by a firm to its partner who, as Karta represented an HUF in the firm i,e. The Court has observed that the assessment of a firm have to be made strictly in accordance with the provisions of Section 40 b and the law has to be taken as it was. Since remuneration to partner was not admissible under the old Section 40 b , hence it was held that the said clause expressly prohibits such deduction.

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Differences between Partnership & HUF Business

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Hindu Undivided Family carrying on a family business are not partners in the sense that their relationship inter it is not governed by the Partnership Act, , but the Hindu Law while deciding joint ownership in the family business. The only substantial resemblance between the two forms of association seems to be that in each case the members carry on business together.

In all other respects, they are wholly dissimilar. Regulating Law A partnership is governed by the provisions of the partnership Act, A joint Hindu family business is governed by the principles of Hindu law.

Creation It arises from an agreement. It arises by status or operation of law. A new member is admitted just by birth. Death Death of a partner ordinarily leads to the dissolution of partnership. Death of a member in the HUF does not give rise to the dissolution of the family business. Management All the partners are equally entitled to take part in the partnership business. The right of management of Joint family business generally vests in the Karta, the governing male members of the family.

Number of Members In a partnership the maximum limit of partners is 10 for banking business and 20 for any other business. There is no maximum limit of members in the case of joint HUF business. Right of Share profits In a partnership each partner is entitled to claim his separate share of profits.

A member of a joint HUF business has no such right. His only remedy lies in a suit for partition. Liability The liability of a partner is unlimited. The liability of the karta is unlimited, and the other coparceners are liable only to the extent of their share in the profits of the family business, unless they take part in the act performed or transactions entered into by the Karta.

A minor becomes a member of the ancestral business by the incidence of birth. He does not have to wait for attaining majority. Continuity A firm subject to a contract between the partners gets dissolved by death or insolvency of a partners.

A HUF has continuity till it is divided. The status of HUF is not thereby affected by the death of a member. Terms Privacy Contact Developed by Scoopskiller. In a partnership the maximum limit of partners is 10 for banking business and 20 for any other business. A minor cannot a partner,through he can acquire benefits of partnership, only with the consents of all the partners.

A firm subject to a contract between the partners gets dissolved by death or insolvency of a partners.

Distinction between Partnership and Joint Hindu Family Firm

Hindu Undivided Family carrying on a family business are not partners in the sense that their relationship inter it is not governed by the Partnership Act, , but the Hindu Law while deciding joint ownership in the family business. The only substantial resemblance between the two forms of association seems to be that in each case the members carry on business together. In all other respects, they are wholly dissimilar. Regulating Law A partnership is governed by the provisions of the partnership Act,

A partnership comes into existence, by means of a contract between partners, whereas, a joint Hindu family hereinafter referred to as HUF arises as a result of status, i. Accordingly, if two or more members of an HUF carry on an inherited business, it is not a partnership because it has been created by status or obtained by birth and not by an agreement.

The following are the top 10 differences between a Partnership business and HUF business. A partnership is a contractual relationship arising out of an agreement among the partners. A Joint Hindu Family Firm on the other hand, is a creation of law. It arises out of status and not out of an agreement.

Difference Between Partnership and Hindu Undivided Family

It is often referred to as an archaic remnant associated with feudal structures of land and property holdings. This paper is an attempt to arrive at a comprehensive delineation of the role of the HUF in the corporate governance and taxation regime in independent India. The HUF found legal recognition in the late 19 th century, but it was the Income Tax Act under colonial rule in that gave it the status of a separate and distinct tax entity. The legal category of the HUF has existed in the tax code since then. This inclusion is based on a much longer history of recognition of customary law by the British colonial state in India. In the interpretation of the colonial state, the HUF represented a joint family that was held together by strong ties of kinship and entailed a variety of joint property relations among the members. There were blurred and porous boundaries between the cultural underpinnings of the family as a social entity and the commercial existence of the family as a trading entity. These porous boundaries were a function of marriage, lineage, patriarchal ties, and trade and business. This sharp exclusivity of definition inherent in the neoclassical conception of economic activities—with a tight compartmentalization of production and consumption—created for the state the dilemma of deciding what the HUF was at the time the Income Tax Acts of and were passed. Finally in the debate on the Super Tax Bill of , it was proposed the HUF be recognized as a distinct category for taxation, in order to overcome the problem of the dual characteristics of being a family and a business entity.

Difference between Partnership and Co-Ownership

Partnership and co-ownership are two different things. The ownership of a property by more than one person is called co-ownership. If two brothers purchase a property collectively, it will be a case of co-ownership. The property will be disposed off with the consent of all the co-owners.

A limited company and other forms of associations have large number of similarities and dissimilarities. Both individuals are subjects and trading is the object.

Partnership is the result of an agreement between the parties. In other words it can be said that mutual agreement between persons constituting Partnership is necessary for the establishment of partnership. On the other hand Hindu Joint Family Firm is the result of status, not of agreement. Members of Hindu joint family firm inherit such business in succession.

Distinguish Between – Partnership Firm and Joint Hindu Family Firm

Madhusudan Saharay. The Indian Law of Partnership. Carrying on Business. Competency of Person.

Distinction between Partnership and Joint Hindu Family 1. Regulating law: A partnership is governed by the provisions of the Indian Partnership Act, Whereas A joint Hindu family business is governed by the principles of Hindu law. Mode of creation: A partnership arises out of a contract, whereas a joint Hindu family business arises by the operation of law and is not the result of a contract. Latest law News. Breaking News. Difference between Partnership and Joint Hindu family.

Difference between Partnership and Joint Hindu family

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In the co-ownership, there is only a joint ownership without any business motive. In partnership joint ownership and business are combined. Difference between.

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Difference & Distinguish Between a Company and a Partnership firm

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