demerits of joint Hindu
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Answer:
Disadvantages of Joint Hindu Family Business:
1. Limited resources: Joint Hindu Family business has generally limited financial and managerial resource. Therefore, it cannot undertake big and risky business.
2. Lack of motivation: There is always a lack of motivation among the members to work hard. It is because the benefit of hard work does not go entirely to any individual member but shared by all the co-parceners.
3. Scope for misuse of power by the karta : Since the karta has absolute freedom to manage the business, there is scope for him to misuse it for his personal gains. An inefficient karta can also do harm to the business.
4. Scope for conflict: In a Joint Hindu Family business the male members of three successive generations are involved. It always leads to conflict between generations.
5. Instability: The continuity of business is always under threat. It may be due to a small rift within the family and if a co-parcener asks for a partition the business is closed. Suitability of Joint Hindu Family Business: The success of Joint Hindu Family business is mostly dependent upon the efficiency of the karta and the mutual understanding between the co-parceners. Nevertheless, this type of business is losing its ground with the gradual decline in the joint Hindu family system.
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