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HUF stands for Hindu Undivided Family. You can save taxes by creating a family unit and consolidating your assets into a single HUF. HUF is taxed separately from its members. A Hindu family can get together and form an HUF. Buddhists, Jains and Sikhs can also form a HUF. HUF has its own PAN and files tax returns independently of its members. The company is run by the head of the family (the oldest member) and his name is Karta. However, all members have the same ownership of an ancestor`s property and are called co-partners. It is the karta of the family that makes all the decisions itself. He is the best person to keep business secrets. A HUF as such can be composed of a very large number of members, including female members as well as distant blood relatives in the male line. Of these, however, coparceners are only males that descend within 4 degrees in a straight line of the common male ancestor.

The relevance of the concept of equicentology is that only coparceners can request a division. Other male family members; that is, others than coparceners in a HUF do not have a direct right to the HUF property, but can only assert rights through the coparceners. Only the karta of the Hindu undivided family has unlimited responsibilities towards family businesses. Other coparceners for members of the family business are limited partners and are liable to a limited extent for the amount of their shares in the family business. Thus, if the company suffers losses, only Karta`s personal assets are obliged to pay the company`s debts. A Hindu undivided family business is a unique form of business in India that is subject to the provisions of the Hindu Succession Act. The head of the HUF, called Karta, is responsible for running the company. Typically, the oldest male member of the family is Karta, while the others are known as co-parceners. Equal rights of members: The biggest disadvantage of opening a HUF is that its members have equal rights to property. Common goods cannot be sold without the consent of all members. All family members who enter by birth or marriage become members of the HUF and enjoy equal rights.

A HUF can become too large to handle. After that, Karta is forced to open an a/c bank in HUF`s name. The HUF is now ready to use. Karta must invest in tax-saving instruments and file tax returns on behalf of the HUF. Only money associated with HUF`s activities is invested in such bank accounts. Joint Hindu family business refers to a business organization that is managed and managed solely by HUF members. This business is also known as Hindu undivided family business or HUF business. The common family system is losing its relevance: HUF has been recognized by the Income Tax Department as an independent taxable entity.

However, nowadays, where nuclear families are the norm, HUF is losing its relevance. Several cases have emerged where couples or families struggle over common household expenses and forget to pool their assets. Divorce rates are increasing and, as a result, the HUF is losing its importance as a tax vehicle. Membership of the joint family business can only be taken over by birth in the family. The three successive generations can be the members of the Hindu undivided family business. Karta is the head of the HUF, which controls the family business. After Karta`s death, the oldest member of the HUF becomes Karta and he will continue the family business. The shareholders of the joint family business are the actual members of the Hindu undivided family.

It creates the best and quality in the industry. Any transaction concluded with loyal partners will grow quickly compared to other companies. And in my opinion, this is the best part of the joint family business. Hindu Undivided Family Business is a specific type of business structure that can only be found in India. This is one of the classic methods of business structure in the country. It is administered by Hindu law. The source of membership in the company is the birth in a family and 3 consecutive generations can be members of the company. A joint family business is a form of business in which members of an undivided Hindu family, male or female, become the partners in running the business.

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