Give any four demerits of Joint Hindu Family Business.

(i) Limited Resources : Business is done by the joint family. So capital brought in by the family is limited. The capacity to raise funds is also limited as liability of co-parceners is limited. This affects growth and expansion of business.

(ii) Limited Managerial Ability : The management of business is totally taken care of by Karta. So the entire business depends upon the ability of the Karta. He does not even consult co-parceners for decision making. The Karta may not be an expert in all areas of business. Due to inadequate funds it is not possible to hire experts. Therefore, Joint Hindu Family Firm faces the disadvantage of limited managerial ability.

(iii) Unlimited Liability : The liability of Karta is unlimited. His decision making process becomes very slow. He is too cautious and unwilling to take risk in business. As there is no difference between personal property and business property of Karta he is afraid to take bold decisions. This affects the progress of business.

(iv) Limited Expansion : Even if Karta takes a lot of interest in business, the firm has the disadvantage of limited growth. Two reasons i.e., limited capital and limited managerial ability results in limited growth of business.