Business structure
Business structure, An Hindu Undivided Family is distinguished from a partnership by its unique legal nature and structure, rendering it a distinct entity.
Here are a few reasons why HUF is not categorize as a partnership
Formation:
A partnership is form by an agreement between two or more individuals or entities to carry on a business together and share profits and losses. On the other hand, an HUF is form by the operation of Hindu law and is automatically create when a Hindu family comes together as a joint family unit. Legal entity:
Legal Entity:
A partnership is a separate legal entity from its partners, while an HUF is not consider a distinct legal entity. The HUF is seen as an extension of the joint family and comprises the family members and their ancestral property.
Liability:
In a partnership, the partners have unlimited liability, meaning they are personally responsible for the debts and obligations of the partnership. In the case of an HUF, the liability is ltd to the extent of the joint family property.
And individual family members are not personally liable for the HUF’s debts.
Management:
In a partnership, the partners actively participate in the management and decision-making of the business. In an HUF, the Karta, who is typically the eldest male member of the family, manages the affairs of the HUF and makes decisions on behalf of the family.
Dissolution:
Partnership can be dissolve by mutual agreement, expiration of the partnership term, or other specified events mentioned in the partnership agreement. On the other hand, an HUF continues to exist until it is legally partition or ceases to have any joint family property.
It’s important to note that the laws and regulations governing partnerships and HUFs may vary in different jurisdictions. It’s always advisable to consult with a legal professional or seek advice from a qualified expert.
To understand the specific legal implications and differences in your jurisdiction.
For more information visit this site: https://www.mca.gov.in