HUF vs Partnership
HUF (Hindu Undivided Family) vs Partnership are two distinct legal entities with different characteristics:
Hindu Undivided Family
HUF is a specific type of family business structure recognize under Hindu Law in India. It is a separate legal entity form by members of a Hindu family who are lineal descendants of a common ancestor. HUF has its own PAN (Permanent Account Number) and can own assets, incur liabilities, and engage in business activities. The HUF is manage by the Karta, who is typically the eldest male member of the family.
Partnership:
A partnership is a legal form of business organization where two or more individuals come together to carry on a business with a view to making a profit. In a partnership, the partners contribute capital, share profits and losses, and have joint decision-making authority. The partnership is govern by a partnership agreement that outlines the rights, responsibilities, and obligations of the partners.
While both HUF and partnership involve multiple individuals coming together for business purposes, they differ in their legal nature and formation. HUF is specifically applicable to Hindu families and is govern by Hindu Law.
While a partnership can be form by individuals of any religion and is govern by the Indian Partnership Act, 1932.
It’s important to consult with a legal or financial advisor to understand the specific legal and financial implications of forming and operating either an HUF or a partnership, as the requirements, rights, and obligations can vary base on applicable laws and regulations.
To visit: https://www.mca.gov.in/
