The JHF business is on the decline due to its Imitations. Explain any five such limitations

cbse
formsofbusiness

#1

(i)Limited Resources : The JHF faces the problem of limited capital as it depends mainly on ancestral property. So, the scope of expansion is limited.
(ii)Unlimited liability of Karta: The karta has not only dual burdens of making decisions and management of business but also suffers from the disadvantage of unlimited liability this restricts him to innovate his business.
(iii)Dominance of Karta : The centralisation of power to take decisions in the hands of Karta, may cause conflict among other members. This may lead to breakdown of the family business.
(iv)Limited Managerial skills : Since the Karta can’t be expert in all areas of management, the business may suffer as a result of his unwise decision.
(v)Instability : In Hindu Undivided family business quite often there is lack of confidence, trust and mutual faith among the family members which leads to discontinuity of the business unit.