uTrade AlgosWhen the Karta of an HUF passes away, the continuity of the HUF and its trading account depends on the number of remaining coparceners and their eligibility. Here’s a detailed explanation covering all possible scenarios:
1. If There Are Multiple Coparceners in the HUF
New Karta Selection:
- The eldest coparcener (male or female) becomes the new Karta by default, as per Hindu Law.
- If the eldest coparcener declines to take on the role, the next eligible coparcener can assume the position, provided the family agrees and a notarised declaration is submitted.
Responsibility of the New Karta:
- All legal and financial operations of the HUF trading account, such as trading activities or investments, are carried forward under the new Karta’s authority.
2. If There Is Only One Coparcener Left in the HUF
HUF Dissolution:
- A minimum of two coparceners is required to maintain an HUF and its trading account. If only one coparcener remains, the HUF is dissolved as per legal provisions.
- The HUF’s assets, including the income or funds from the trading account, are distributed to the sole remaining coparcener, subject to legal and tax implications.
3. If All Remaining Coparceners Are Minors
Guardian Appointment:
- If all coparceners are minors, the eldest minor can become the Karta and their mother or another legal guardian acts on their behalf.
- The guardian manages the HUF’s trading account until the minors attain the age of majority.
Karta Appointment upon Majority:
- Once the eldest coparcener attains adulthood, they can take over as the Karta of the HUF and manage the trading activities using the trading account.
4. If the HUF Includes Female Coparceners
Following legal reforms, the eldest daughter or any eligible female coparcener can become the Karta after the father’s demise.