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Distinguish between the following:

Joint Hindu Family Firm and Sole Trading Concern.

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Joint Hindu Family Sole Trading Concern
Meaning In Joint Hindu Family Firm, the Joint Hindu Family conducts business according to Hindu Laws. Sole Trading Concern is owned and controlled by one person.
Formation Joint Hindu Family Firm comes into existence by operation of Hindu Law. Sole Trading Concern can be formed easily. It is started as soon as the owner decides.
Number of Members Membership of the firm depends upon the birth and death in the family. There is no limit on membership. Sole Trading Concern is owned by a single person.
Sharing of Profits/Losses The profits and losses shared between Karta and Coparceners. The sole trader alone enjoys all the profits of business. He alone bears the losses of business.
Liability Karta has unlimited liability. The liability of Coparceners is limited. The sole trader has unlimited liability.
Act Joint Hindu Family Firm follows the Hindu Succession Act, 1956. There is no special legislation governing the sole trading concern.
Stability Comparatively more stability because if Karta dies, the next seniormost family member can take over the business. There is no stability as life of the organization depends upon the survival of the sole trader.
Capital More finance is available with the firm. Therefore, there is more capital. ole trader has limited funds. Therefore, the concern has limited capital.
Ownership Assets and property of business is jointly owned by family members. Assets and properties of business are owned by the sole trader.
Efforts and Rewards There is no direct relation between efforts and rewards There is a direct relation between efforts and rewards.

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