HUF vs company, HUF (Hindu Undivided Family) and a company are two distinct legal entities with different characteristics and implications.
Here are some points of comparison between HUF and a company:
1. Formation:
HUF formed by the members of a Hindu family, including their ancestors and lineal descendants and it is create by operation of law.
A company, on the other hand, formed by a group of individuals or entities who come together for a common business purpose and registered under the applicable company law.
2. Legal Status:
HUF is not a separate legal entity distinct from its members. It operates under the umbrella of personal law and has limited legal recognition.
A company, on the other hand, is a separate legal entity from its owners and has its own legal rights, obligations and liabilities.
3. Ownership and Liability:
In HUF, the property is held jointly by all its members and there is collective ownership. The liability of the HUF limited to the assets owned by the HUF.
In a company, the ownership determined by the shareholding pattern and the liability of the company limited to the extent of the company’s assets, with the shareholders having limited liability.
4. Governance and Management:
HUF is typically managed by the Karta, who is usually the senior-most male member of the family. The decision-making process guided by the customs and traditions of the family.
A company has a more structured governance framework with a board of directors and shareholders’ meetings and decisions are make according to the provisions of the applicable company law.
5. Taxation:
HUF treated as a separate tax entity for income tax purposes and is eligible for specific tax benefits and exemptions applicable to HUFs.
A company is also a separate tax entity and is subject to the tax laws applicable to companies, including corporate income tax. HUF vs company
T0 visit:https://www.mca.gov.in
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