Difference Between HUF and Partnership | Indian Partnership Act – Judiciary Exam – Free PDF

INDIAN PARTNERSHIP ACT, 1932

DIFFERENCE BETWEEN HINDU UNDIVIDED FAMILY AND PARTNERSHIP FIRM

Regulating Law

• PARTNERSHIP FIRM
• A partnership is governed by the provisions of the partnership Act,1932.
• HINDU UNDIVIDED FAMILY
• A joint Hindu family business is governed by the principles of Hindu law.

Creation

• PARTNERSHIP FIRM
• It arises from an agreement.
• HINDU UNDIVIDED FAMILY
• It arises by status

Name of the Persons Involved

• PARTNERSHIP FIRM
• The persons who form partnerships are called ‘Partners’.
• HINDU UNDIVIDED FAMILY
• The persons who are members of the HUF are called ‘Coparceners’.

Admission of new Members

• PARTNERSHIP FIRM
• No new partners are admitted without the consent of all the partners.
• HINDU UNDIVIDED FAMILY
• A new member is admitted just by birth.

Management

• PARTNERSHIP FIRM
• All the partners are equally entitled to take part in the partnership business.
• HINDU UNDIVIDED FAMILY
• The right of management of the Joint family business generally vests in Karta, the governing male members of the family.

Number of Members

• PARTNERSHIP FIRM
• In a partnership, the maximum limit of partners is 10 for a banking business and 20 for any other business.
• HINDU UNDIVIDED FAMILY
• There is no maximum limit of members in the case of joint HUF business.

Right of Share profits

• PARTNERSHIP FIRM
• In a partnership, each partner is entitled to claim his separate share of profits.
• HINDU UNDIVIDED FAMILY
• A member of a joint HUF business has no such right. His only remedy lies in a suit for partition.

Authority of Bind the Firm

• PARTNERSHIP FIRM
• Every partner can, by his act, bind the firm.
• HINDU UNDIVIDED FAMILY
• The ‘Karta’ or the manager has the authority to contract for the family business.

Liability

• PARTNERSHIP FIRM
• The liability of a partner is unlimited.
• HINDU UNDIVIDED FAMILY
• The liability of the Karta is unlimited, and the other coparceners are liable only to the extent of their share in the profits of the family business unless they take part in the act performed or transactions entered into by the Karta.

Minor’s Capacity

• PARTNERSHIP FIRM
• A minor cannot be a partner, though he can acquire benefits of partnership, only with the consent of all the partners.
• HINDU UNDIVIDED FAMILY
• A minor becomes a member of the ancestral business by the incidence of birth. He does not have to wait for attaining the majority.

Continuity

• PARTNERSHIP FIRM
• A firm subject to a contract between the partners gets dissolved by the death or insolvency of a partner.
• HINDU UNDIVIDED FAMILY
• A HUF has continuity until it is divided. The status of HUF is not thereby affected by the death of a member.

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