Q.What is a Joint Hindu Family Business?

A Joint Hindu Family Business grows out of Hindu Law and family status rather than any agreement between its members, which is what makes it different from a partnership.

A Joint Hindu Family (JHF) Business is a form of business organisation owned and carried on by the members of a Hindu Undivided Family (HUF). Unlike a partnership, which is created only by agreement between persons who choose to join it (Section 4, Indian Partnership Act, 1932), a JHF business arises purely from status — a person becomes a member (coparcener) simply by being born into the family, with no separate act of joining required. It is governed by Hindu Law rather than by any single dedicated business statute — in Andhra Pradesh, and in most of India, the Mitakshara school of Hindu Law applies, under which a coparcener acquires a right by birth in the family's ancestral property and business. The business is managed by the Karta, ordinarily the senior-most member of the family, and continues from generation to generation by survivorship rather than being dissolved by the death of any one coparcener.

Students often describe a JHF business as 'a type of partnership between family members.' This is incorrect and is exactly what Section 5 of the Indian Partnership Act, 1932 rules out — membership arises from family status/birth, never from a contract of partnership.