The karta in Joint Hindu family business hasa)Limited liabilityb)No liability for debtsc)Unlimited liabilityd)Joint liabilityCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

According to the Hindu law a karta  has unlimited liability in the business.

Answer

Because karta is the person who manages and controls all the activities of the firm

Answer

The liability of all members except the karta is limited to their shares of co-parcenery property of the business. The karta, however, has unlimited liability

Answer

Karta is the eldest male members of the family who is responsible for managing and controlling the business.

Answer

Unlimited liabilities  because he is the head

Answer

Unlimited liability:
In a Joint Hindu Family Business, the karta is the head of the family and manages the affairs of the business. The karta has unlimited liability, which means that they are personally responsible for all the debts and obligations of the business. This means that if the business is unable to pay its debts, the karta may have to sell their personal assets to settle the obligations.

Explanation:
In a Joint Hindu Family Business, the business is owned and operated by the members of a Hindu joint family. The karta is the eldest male member of the family and is responsible for managing the business. The karta has the authority to make decisions on behalf of the entire family and is regarded as the head of the family.

Unlimited Liability:
In this type of business, the karta has unlimited liability. This means that they are personally liable for all the debts and obligations of the business. If the business fails to pay its debts, the creditors can claim the assets of the karta to settle the obligations. The karta's personal assets, such as property, bank accounts, and investments, can be seized to satisfy the business debts.

Joint Liability:
While the karta has unlimited liability, the other members of the joint family have joint liability. This means that they are jointly responsible for the debts and obligations of the business. If the business is unable to pay its debts, the creditors can go after the assets of any member of the joint family to settle the obligations.

Example:
For example, let's say a Joint Hindu Family Business takes a loan from a bank to expand its operations. If the business fails and is unable to repay the loan, the karta will be personally responsible for the debt. The bank can take legal action against the karta to recover the outstanding amount. In this case, the karta may have to sell their personal assets, such as their house or car, to repay the loan.

Conclusion:
In summary, the karta in a Joint Hindu Family Business has unlimited liability, which means they are personally responsible for the debts and obligations of the business. This distinguishes the karta from the other members of the joint family who have joint liability.

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